Real Estate Speculation Investigation Ultimately Fizzling Out?

Two Months Passed but Criticism of 'Mangtang Investigation' Remains
Only 16 Local Officials Arrested
No High-Ranking Officials Included
Investigation of LH Employees Still Ongoing
Where Is the 'Principle of Arrest Investigation'?

[Asia Economy Reporter Lee Gwan-joo] As the joint government special investigation headquarters (Special Investigation Headquarters) continues its probe into real estate speculation allegations triggered by Korea Land and Housing Corporation (LH) for over two months, criticism is mounting that the investigation is ineffective. The investigation targeting key figures such as politicians and high-ranking public officials has yet to yield significant results.

According to the Special Investigation Headquarters on the 21st, a total of 16 people have been arrested on charges of speculation using insider information (violation of the Act on the Prevention of Corruption and the Establishment and Operation of the Anti-Corruption and Civil Rights Commission) as of that day. The Gwangju Police Agency’s Special Investigation Unit for Real Estate Speculation arrested a former director-level official of Gwangsan District Office yesterday for purchasing land worth approximately 1.35 billion KRW using insider information. On the 18th, Han Mo, a former regional aide to Minister of the Interior and Safety Jeon Hae-cheol, was also arrested on suspicion of purchasing land under his wife’s name using information related to the development of the 3rd New Town site. The Special Investigation Headquarters has also applied for arrest warrants for a former Korea Expressway Corporation employee, the chairman of Daegu Dalseong County Council, and a council member of Asan City in Chungnam Province.

Investigations into high-ranking officials remain at a standstill. Even among those arrested so far, they are limited to local government officials or employees of public enterprises. This includes the first arrested case of a Pocheon City official in Gyeonggi Province, former Gyeonggi Provincial Government officials, LH employees, and Korea Rural Community Corporation employees. Among elected officials, most are local council members such as a council member from Goryeong County in Gyeongbuk Province and a former council member from Siheung City in Gyeonggi Province. Only one former local government head, the ex-mayor of Yanggu County in Gangwon Province, has been arrested.

The Special Investigation Headquarters has consistently emphasized that arrest investigations will be the principle for public officials suspected of speculation using insider information. As of the 17th of this month, the investigation targets 2,319 people, with 1,214 (52.4%) being pure insider information speculation cases excluding planned real estate speculation. By occupation, there are 5 members of the National Assembly, 5 high-ranking public officials, 10 local government heads, 50 local council members, 80 national public officials, 164 local public officials, and 64 LH employees. Regardless of the fact that some arrest warrants were rejected by the courts, questions arise as to how well the Special Investigation Headquarters has adhered to its initially stated ‘principle.’

In particular, there have been no arrests of high-ranking officials. Among the five National Assembly members suspected of speculation, four except for Kang Ki-yoon of the People Power Party are expected to be effectively ‘not prosecuted.’ Among high-ranking public officials, the first investigated was a former official of the Administrative City Construction Agency (Happiness Agency Director, vice-minister level), for whom an arrest warrant was applied for on the 30th of last month, but supplementary investigations have been ongoing for over two weeks following the prosecution’s request. A Special Investigation Headquarters official explained, "During the supplementary investigation, new information related to one Happiness Agency employee has emerged and is being verified."

The Special Investigation Headquarters has rebutted criticisms of ‘inadequate investigation’ by stating that confirming the use of insider information in high-ranking officials’ cases inevitably takes time. However, considering that investigations into LH employees initially reported by the People’s Solidarity for Participatory Democracy have not yet been completed, this argument is less convincing. Moreover, even the arrest warrant application for ‘Kang Sajang,’ a key figure related to LH employees, is undergoing additional supplementary investigations following the prosecution’s request. This is why, during the recent National Assembly Public Administration and Security Committee briefing, members from both ruling and opposition parties strongly demanded "thorough and swift investigations." Meanwhile, new allegations of public officials’ speculation continue to emerge, such as the controversy over special apartment supply in Sejong using a ‘ghost office building’ of the Customs Evaluation and Classification Office under the Korea Customs Service, and insider information speculation allegations involving Happiness Agency employees. These new suspicions keep piling up even as the initial investigations remain unfinished.

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