Seoul's 7 Redevelopment and Reconstruction Associations Referred to Prosecutors for Investigation

[Asia Economy Reporter Yoo In-ho] Seven redevelopment and reconstruction associations in Seoul will be subject to prosecution investigations due to illegal activities.

The Ministry of Land, Infrastructure and Transport announced on the 21st the results of a joint inspection of redevelopment and reconstruction associations conducted last year.

The Ministry and the Seoul Metropolitan Government conducted inspections on seven associations: Jangwi 6 District, Myeonmok 3 District, Sindang 8 District, Jamsil Miseong and Clover Districts, Sinbanpo 4 District, Sang-A Apartment Phase 2, and Hannam 3 District. As a result, 162 violations related to association management and construction company bidding laws were identified.

Among these, 18 cases will be referred for investigation, 56 cases will receive correction orders, 3 cases will undergo recovery measures, and 85 cases will be subject to administrative guidance. All seven associations are subject to investigation referral.

Some associations borrowed funds from environmental service companies, appraisers, and judicial scriveners without notifying the general assembly and arbitrarily set interest rates and repayment methods.

Associations that signed various service contracts related to project promotion, such as fire safety or asbestos removal, without deciding on contractors or amounts through general assembly resolutions will also face investigations.

One association chairman traveled overseas without board approval and failed to submit related reports. The Ministry plans to recover several million won in allowances and travel expenses from the association.

The Ministry also plans to refer association executives who failed to fulfill mandatory disclosure obligations, such as general assembly minutes, service provider selection contracts, and project implementation plans, for investigation.

During the inspection of associations, illegal activities related to construction companies’ bidding were also confirmed. A construction company that promised to provide sprinklers, balcony double windows, etc., free of charge in the bid proposal but actually included the costs in the construction expenses will be investigated.

A correction order was issued to a construction company that proposed excessive design changes with low feasibility during the bidding process.

In November last year, when bidding for the Hannam 3 District construction company selection overheated, the Ministry conducted an on-site investigation and referred three construction companies that participated in the bid for investigation; however, this current investigation is separate from that.

The Ministry and Seoul Metropolitan Government will take legal actions on the detected cases and plan to continuously inspect construction company bidding and association management processes this year as well.

This content was produced with the assistance of AI translation services.