Seoul City Cracks Down on Construction Industry Paper Companies... 8 Unqualified Firms Detected

Inspection of Registration Standards for 31 Construction Contractors Transferred from Other Cities and Provinces

[Asia Economy Reporter Jo In-kyung] Seoul City announced on the 5th that it detected 8 suspected unqualified companies after verifying whether 31 construction businesses that recently relocated from other cities and provinces met the registration criteria for construction businesses, such as capital, technical personnel, and office space.

This is because paper companies (construction businesses that do not meet registration criteria) without direct construction capability or with poor capacity, when awarded contracts, deprive sound construction companies of opportunities and cause problems such as subcontractor poor-quality construction and wage arrears.

In this inspection, 6 companies were found to have capital below the construction business registration standard of 350 million KRW. These companies showed long-term receivables unlikely to be collected, large receivables without documentation, debts not recorded in the books, and failure to submit materials.

Additionally, according to the National Technical Qualifications Act, architectural construction businesses must assign at least 5 construction technicians and site-specific technicians, but after checking certificates of technical personnel, insurance, and payroll details, 3 companies were found to have insufficient technical personnel.

According to construction business management regulations, an independent office space is required, but 4 companies were found to be sharing office space with other construction businesses or had no office at all.

The city plans to promptly conduct hearings for the suspected unqualified companies and impose administrative sanctions such as business suspension. For construction businesses relocating to Seoul from other cities and provinces, the Korea Construction Association will strengthen office inspections.

Furthermore, to eliminate poor and illegal construction companies, the city will crack down on paper companies from the bidding stage, impose administrative sanctions such as business suspension if detected, and exclude them from qualification reviews.

Han Je-hyun, Director of Seoul City’s Safety General Office, said, "To change the structure where paper companies participate in bids and gain unfair profits, we will conduct thorough inspections from the bidding stage and ensure that opportunities go to sound companies."

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