Ministry of Land, Infrastructure and Transport Establishes REITs Reporting and Consultation Center to Prevent Illegal Activities in Advance

Ritz Reporting Consultation Center Online Access Screen

[Asia Economy Reporter Moon Jiwon] The Ministry of Land, Infrastructure and Transport announced on the 18th that it will establish a REITs (Real Estate Investment Trusts) Reporting and Consultation Center at the Korea Appraisal Board to foster a sound order in the rapidly growing REITs market.

According to the Ministry, the size of the REITs market was 34.2 trillion KRW in 2017, 43.2 trillion KRW in 2018, and 51.2 trillion KRW last year, showing rapid growth every year.

The Ministry explained, "As the asset size of the REITs market expanded to about 51 trillion KRW, related damage cases and types have diversified," adding, "there were calls for the establishment of a specialized reporting and consultation window to respond to this."

In fact, the number of REITs that received sanctions such as license cancellations or fines due to insolvency or illegal operations increased from 4 cases in 2017 to 5 cases in 2018, and 10 cases last year.

In 2018, A Partners REITs was caught for raising investment funds under the pretext of pursuing stock exchange listing without proper business authorization, and in the same year, there was also a REIT that was caught embezzling about 100 billion KRW of investor funds after false loans. Recently, a REIT suffering from excessive capital erosion was also issued a corrective order.

The Ministry plans to build the REITs Reporting and Consultation Center to prevent illegal activities related to REITs in advance and provide more systematic consultations. The center will be operated by the Korea Appraisal Board. Anyone can report after consenting to the provision of personal information through the online reporting center within the REITs information system, and consultations will be conducted via a dedicated phone line of the Korea Appraisal Board’s REITs Review Team.

Reporting targets include impersonation of REITs similar trade names, illegal business operations without authorization (registration), and violations of related laws such as the Real Estate Investment Company Act. Consultations cover ▲REITs authorization and registration standards and procedures ▲management of asset management professionals and REITs operation methods ▲inquiries about related laws and systems such as the Real Estate Investment Company Act ▲REITs statistics and information.

If illegal activities are confirmed during the reporting and consultation process, administrative actions such as license cancellation, fines, corrective orders, or requests for investigation will be taken.

A Ministry official said, "We hope that the REITs Reporting and Consultation Center will create a sound REITs investment environment, protect the national property rights, and contribute to the revitalization of the REITs market."

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