Speculation Profit Fines Up to 5 Times... Hastily Initiating the 'LH Scandal Prevention Act'

Lee Nak-yeon, Leader of the Democratic Party, and Minister Byun Chang-heum Summoned to the National Assembly
"Must Have a Sense of Responsibility to Volunteer for Investigation Before Anyone Else"

Lee Nak-yeon, leader of the Democratic Party of Korea, is attending the Supreme Council meeting held at the National Assembly on the 5th and delivering opening remarks. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kangwook Cho] As suspicions of preemptive speculation involving 10 billion won by employees of Korea Land and Housing Corporation (LH) in the Gwangmyeong-Siheung district spread rapidly, the government and political circles have hastily begun revising laws to prevent recurrence. The current law is criticized for being difficult to apply unless directly involved in new town projects, and for imposing fines that are too light compared to the enormous profits gained from speculation, resulting in lenient punishments.

According to the government and political circles on the 5th, Lee Nak-yeon, leader of the Democratic Party of Korea, summoned Minister of Land, Infrastructure and Transport Byeon Chang-heum and Acting President of LH Jang Chung-mo to the National Assembly on the same day, ordering them to "investigate thoroughly and according to principles without any prejudice, and disclose the results to the public." Lee especially told Minister Byeon, "You should have a sense of responsibility to the extent of volunteering to be investigated before anyone else."

The ruling party leadership called for a tough response. At the party’s supreme council meeting that day, No Woong-rae, a supreme council member, said, "Strict and definite measures are necessary regarding the LH incident," adding, "There should be a large-scale audit not only limited to the 3rd new town but covering the entire development process over the past 10 years."

Kim Tae-nyeon, floor leader of the Democratic Party, said at the policy coordination meeting held the previous day, "We will promptly prepare strong institutional measures to prevent speculation by public institutions and public officials," and "We will consider measures to legally punish public officials who use information related to their duties for private gain and to recover speculative profits."

Imprisonment Over 1 Year and Fines 3 to 5 Times the Profit for 'Aggravated Punishment'

Earlier, Democratic Party lawmaker Moon Jin-seok proposed an amendment to the ‘Special Act on Public Housing’ the day before, which significantly strengthens penalties for speculation by public officials and employees of public institutions. The amendment stipulates that public housing developers, the Ministry of Land, related central administrative agencies, local governments, and related workers who use or disclose information obtained during their duties for purposes other than intended shall be subject to imprisonment of more than one year and fines amounting to 3 to 5 times the profits. Properties acquired through such means will be confiscated, and if the profits are large, aggravated punishment including simultaneous imprisonment and fines can be imposed. The current law only provides for imprisonment up to five years and fines up to 50 million won, without a separate mechanism for confiscating profits, leading to criticisms of ineffective punishment.

Democratic Party lawmaker Park Sang-hyuk is also preparing an amendment to raise fines to levels comparable to financial crimes (3 to 5 times the profits) to recover speculative gains.

The opposition party also agrees on the need to strengthen penalties. On the previous day, members of the National Assembly’s Land, Infrastructure and Transport Committee from the People Power Party who visited the problematic Siheung site under speculation unanimously stated, "We will actively consider measures to strengthen penalties for violations of related laws." Lee Jong-bae, policy chief of the People Power Party, is also reportedly reviewing ways to strengthen punishments.

The government is also considering revising laws to expand the scope and subjects of punishment. Additionally, it plans to revise internal regulations such as personnel rules for each public institution to enable immediate implementation where applicable.

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