Gyeonggi Urban公 Struggles to Devise Measures Against 'Gapyeong Dongyeonjae Residential Complex Fraud'

Bukhangangdong Yeonjae in Daljeon District, Gapyeong

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Urban Innovation Corporation, the first public enterprise to partner with the private sector in construction, has launched multifaceted measures to support residents affected by fraud allegations surrounding the Gapyeong Daljeon-ri Rural Residential Complex (Dongyeonjae).

On the 3rd, Gyeonggi Urban Innovation Corporation explained in a briefing document on Dongyeonjae, "This issue arose from fraud committed by the former private business operator, who was a joint project implementer, entering into direct contracts with residents while unregistered," adding, "After terminating the agreement, during the process of requesting submission of existing contract documents and eviction of the private operator’s unauthorized occupancy, an unexpected and tragic incident occurred where the company’s representative took their own life."

They continued, "The contracts between residents and the private operator were made arbitrarily (without Gyeonggi Urban Innovation Corporation’s knowledge)," and clarified, "Gyeonggi Urban Innovation Corporation did not receive any inquiries regarding this."

Furthermore, "After the incident, Gyeonggi Urban Innovation Corporation is currently identifying the contract details and the amount of damages between the private operator and residents," adding, "There is no appropriate method other than litigation to accurately ascertain the facts and determine responsibility and scope."

Additionally, "Not only residents but also construction and design firms have suffered damages amounting to tens of billions of won due to unsettled payments from the private operator," and "To trace the exact flow of funds related to the private operator’s fraud, the company’s finance director has been criminally charged with fraud and aggravated punishment under the Act on the Aggravated Punishment of Specific Economic Crimes."

Gyeonggi Urban Innovation Corporation further pledged, "We will prepare all possible measures to minimize the damage to residents."

Dongyeonjae is a project initiated in 2009 by Gyeonggi Urban Innovation Corporation, the first local public enterprise to develop a wooden rural housing complex for the middle class. Subsequently, housing construction began on a 59,934㎡ area in Daljeon-ri near Namiseom Island in Gapyeong, consisting of a total of 141 households (115 detached houses and 26 townhouses). In May, registration was completed for 14 units of multi-family housing as a pilot complex.

However, in the same month, the representative of Dream Site Korea (DSK), which had been jointly promoting the project with Gyeonggi Urban Innovation Corporation, suddenly made an extreme choice, revealing a large-scale fraud surrounding Dongyeonjae.

According to Gyeonggi Urban Innovation Corporation, DSK’s agreement was terminated around August last year due to failure to comply with the terms, but even after contract termination, DSK continued recruiting residents for nearly a year by offering discounts on sales prices or lease deposits.

After these facts came to light and financial difficulties intensified, Gyeonggi Urban Innovation Corporation believes the DSK representative made the extreme decision.

Residents are currently demanding that Gyeonggi Urban Innovation Corporation, which jointly conducted the project, compensate for damages since the private developer’s representative responsible for the fraudulent sales has passed away.

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