[Column] Reflecting on the 'Corruption' Allegations of the Anti-Corruption Secretary

[Asia Economy Reporter Lee Ji-eun] Kim Ki-pyo, the Blue House Anti-Corruption Secretary appointed at the end of March, resigned after three months amid allegations of real estate speculation. His resignation came just two days after the disclosure of public officials' asset declarations on the 25th, effectively amounting to a dismissal. However, the Blue House stated that his resignation was not due to "real estate acquisition for speculative purposes." The phrase "measures taken in line with the public's expectations" suggests that while there may be no legal issues, public sentiment was taken into consideration.

Former Secretary Kim purchased two forest land plots (1448㎡ and 130㎡ respectively) in Songjeong-dong, Gwangju, Gyeonggi Province in June 2017. These lands are so-called ‘maengji’ (landlocked plots) without road access, making building permits impossible. However, ‘maengji’ can be highly lucrative if road access is established, making them sought-after properties for contrarian investors in the real estate industry. This is why Kim’s purchase raised suspicions of speculation. Nevertheless, Kim explained that the land cannot be developed even if roads are opened due to Gwangju City's urban planning ordinance (prohibiting development above 50m elevation), denying any speculative intent.

Another suspicion involves a commercial building in the Magok district of Seoul, purchased through loans. Kim’s real estate assets total 9.1 billion KRW, with financial liabilities reaching 5.6 billion KRW. Considering the actual transaction price of the commercial building is 6.5 billion KRW, it appears he mobilized all possible loans, a so-called ‘young-kkeul’ (all-in) loan strategy. The Blue House reportedly reviewed all these details before appointing Kim and judged that there was no speculative purpose.

Can ordinary citizens truly accept the Blue House’s explanation that purchasing commercial property with ‘young-kkeul’ loans is not speculation? Young people can only apply for a loan-to-value ratio (LTV) of 30-40% when buying their first home. Although the LTV for non-homeowners will be raised by 20 percentage points starting next month, a cap of 400 million KRW remains. While citizens are unable to take ‘young-kkeul’ loans, it was naive to think that the tens of billions of won in ‘young-kkeul’ loans by the Blue House secretary in charge of ‘anti-corruption’ would not provoke public outrage?even if misunderstandings about the ‘maengji’ investment were true. If the Blue House only considered the ‘public’s expectations’ after media reports, then where exactly is the standard of the Blue House’s usual verification system set?

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