"Iik Hwan-su" Just Words... Will 'LH Speculation Confiscation' Fizzle Out?

Concerns Over Unconstitutionality Lead to Removal of Retroactive Application
'LH Eradication Act' Passed in Legislation and Judiciary Committee
Public Outrage Grows Amidst Stalled Special Investigation

[Asia Economy Reporter Kangwook Cho] The government and ruling party's grand promises to recover profits from preemptive speculation by Korea Land and Housing Corporation (LH) employees in new towns appear to be fizzling out. Both the ruling and opposition parties have competitively introduced bills to eradicate real estate speculation, but retroactive application of penalties such as profit recovery from speculation has been excluded.

According to the National Assembly and related industries on the 24th, the National Assembly's Legislation and Judiciary Committee held a plenary session the day before and passed some of the so-called 'LH 5 Laws,' including the Public Officials Ethics Act and the Special Act on Public Housing. With the passage of this amendment, employees of public institutions related to real estate, such as LH, who handle real estate-related work or information, will be required to register their assets, and if they trade real estate using undisclosed information or leak it, fines of up to 3 to 5 times the profits can be imposed. In particular, if speculative profits or avoided losses exceed 5 billion won, the sentence can be increased up to life imprisonment.

However, the passed bill does not apply retroactively to employees involved in preemptive speculation in the 3rd phase new towns, citing a high possibility of unconstitutionality. Previously, President Moon Jae-in and Prime Minister Chung Sye-kyun emphasized that "illegal profits will definitely be recovered," but it seems to end up as an 'echo in the void.' Minister of Land, Infrastructure and Transport Byeon Chang-heum also stated at the Legislation Committee, "Whether in the form of fines or confiscation, recovery is appropriate," but added the condition, "if legally possible to recover or punish." This implies that despite the legal amendments to eradicate speculation, recovering profits from LH employees caught for speculation this time is not easy.

According to the National Assembly's bill information system, since the suspicion of land speculation by LH executives and employees surfaced on the 2nd, a total of 47 bills, known as the 'LH Eradication Laws,' have been proposed. These include 17 amendments to the Special Act on Public Housing, 14 to the Public Officials Ethics Act, 11 to the Korea Land and Housing Corporation Act, 3 to the Anti-Corruption Act, 1 to the Urban Development Act, and 1 to the Act on Recovery of Specific Property Crime Proceeds.

On portal site posts, there is an outcry saying, "They said they would dismantle LH, but the story changed to function separation, they said they would confiscate profits, but retroactive application was completely excluded. Only distrust is growing stronger."

Although speculation suspicions are pouring in from all over the country, the sluggish full investigation of retirees and relatives of executives and employees is also fueling public outrage. The Government Joint Special Investigation Headquarters on Real Estate Speculation (Special Investigation Headquarters) has been tasked since the 11th to investigate about 23,000 employees of the Ministry of Land, Infrastructure and Transport, LH, local governments, and local public enterprises, as well as their spouses and direct relatives, but due to limitations in investigative personnel and lack of authority for a full investigation, the investigation is at a standstill. The ruling and opposition parties only began working-level negotiations for the introduction of a special prosecutor related to the LH incident yesterday, more than 20 days after the LH scandal broke out.

Some argue that punishment for existing speculators is possible under the Anti-Corruption Act. A legal expert said, "According to past precedents, in 2006, a public official in Gwacheon City was punished under the Anti-Corruption Act for buying land using development information obtained through official duties." However, he added, "Even in that case, the penalty was limited to fines on the trading profits, and the possibility of confiscating the land is slim."

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