Government Unable to Confirm Family Scope for Investigation...Microscope Verification Needed

Investigation into 'LH Speculation' Critical to Regime's Fate... 'Face-saving Inquiry' Expands Public Distrust
Relatives Separated from Employees Cannot Access Personal Data
Alias Speculation Allegations Unverifiable... Some Employees' Families Refuse to Provide Information
Ministry of Land's 'Self-investigation' Also Controversial

Prime Minister Jeong Sye-gyun is speaking on the morning of the 8th at the Government Seoul Office in Jongno-gu, Seoul, before receiving a report from Nam Gu-jun, Chief of the National Police Agency's National Investigation Headquarters (NIH). The National Investigation Headquarters of the Police Agency is in charge of overseeing the investigation into allegations of speculative investment in new towns by executives and employees of the Korea Land and Housing Corporation (LH). Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporters Kangwook Cho, Mune Won] "Isn't conducting an internal investigation just a way to discipline a few and then end it?" "If the Ministry of Land, Infrastructure and Transport, which oversees LH, participates in investigating the speculation allegations, who would trust the results?"

As speculation allegations involving employees of Korea Land and Housing Corporation (LH) regarding the 3rd New Towns spread, the government formed a joint investigation team to manage the situation, but public sentiment remains unsettled. There are concerns that the government's 'self-investigation' might be a superficial inquiry protecting its own members. Particularly, as it became known that the punishment regulations themselves are vague, making it practically impossible to confiscate land or recover profits, distrust in the government's measures appears to be growing.

◆First Investigation Limited to 'Employees'... Controversy Over Scope of Direct Relatives = The government joint investigation team plans to publicly disclose the land transaction status of all 14,000 employees, including 4,000 from the Ministry of Land, Infrastructure and Transport and 10,000 from LH, related to the 3rd New Towns in the first phase within this week. The announcement is expected around the 11th at the earliest. Initially, the government intended to include employees and their direct relatives in the results, but due to the vast scope of the investigation and controversy over the definition of family members, delays seem inevitable. Assuming an average of three family members (self, spouse, and children) and two direct ascendants, the total investigation target could exceed 100,000 people. There are also reports that some employees' families are refusing to provide personal information.

A Ministry of Land, Infrastructure and Transport official said, "We plan to complete the submission of personal information consent forms from employees themselves by the 8th," adding, "However, due to some confusion regarding direct relatives, we will create new guidelines and obtain consent forms at an appropriate level."

◆"Speculation in Own Name?" Unable to Confirm Speculation Through Nominee Transactions = The problem is that this investigation itself is practically unable to uncover speculation through nominee transactions. The government is currently collecting and using personal information consent from investigation targets to verify land ownership related to the 3rd New Towns and is investigating land transaction details through the land transaction computer network. However, due to the nature of real estate speculation, nominee transactions are common, and personal information of relatives separated from employees' households is inaccessible. The joint investigation team needs to conduct a 'microscopic verification' of nominee speculation allegations, but critics point out that the investigation network is not thorough enough, potentially confirming only the tip of the iceberg before concluding the investigation.

A licensed real estate agent commented, "Among public officials involved in real estate speculation, who would be bold enough to do it under their own or their family's name?" adding, "Those revealed through simple comparison of land registry documents this time are mostly just unlucky to have been caught."

◆Self-Investigation "Like Entrusting Fish to a Cat" = It is also controversial that instead of the prosecution, which has achieved results through large-scale investigations into past new town real estate speculation allegations, the Ministry of Land, Infrastructure and Transport is conducting its own investigation. When the Roh Tae-woo administration announced plans to build new towns in five areas including Bundang in Seongnam, Ilsan in Goyang, Jungdong in Bucheon, Pyeongchon in Anyang, and Sanbon in Gunpo, real estate prices soared, prompting the establishment of a joint prosecution investigation headquarters in 1990 for a large-scale investigation. During the Roh Moo-hyun administration's 2nd New Town development, when real estate speculation became serious, the prosecution declared a 'war on speculation criminals' in 2005.

On the 7th, People's Solidarity for Participatory Democracy and the Lawyers for a Democratic Society commented, "To increase public trust, forced investigations by investigative agencies or audits by the Board of Audit and Inspection should be conducted alongside the government's joint investigation team," adding, "There is significant suspicion that the government's internal investigation will result in a protective, minimized, and passive inquiry."

◆Confiscation of Land and Profits Impossible... Concerns of a Half-Hearted Outcome = Although the government emphasized thorough eradication and strict punishment, the reality that it is difficult to recover profits or exclude suspects from compensation is also problematic. Under current law, if separate profit confiscation regulations cannot be applied, cash or land-for-land compensation will inevitably proceed according to the new town compensation procedures regardless of punishment. Especially since the investigation scope is broad and it is ambiguous what constitutes 'insider information' to determine guilt, proving allegations is expected to be difficult. Even if regulations banning land transactions related to new land development by relevant ministry and corporation employees and their families are newly established, retroactive application would be difficult.

Professor Kwon Dae-jung of Myongji University's Department of Real Estate emphasized, "It is appropriate to form a joint investigation team with the private sector or have the prosecution conduct the investigation directly," adding, "Nominee transaction investigations must be conducted," and "Only by investigating public officials, public institution employees, and their relatives can the allegations be clearly revealed."

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