[2021 National Audit] Lee Dong-geol "Daewoo Construction Sale... Proceeding Through Legal Procedures"

[Image source=Yonhap News]

[Asia Economy Reporter Jin-ho Kim] Lee Dong-geol, Chairman of the Korea Development Bank (KDB), stated on the 15th that the sale of Daewoo Construction by KDB Investment was "carried out as fairly and objectively as possible within appropriate procedures."

Chairman Lee made this remark during his attendance at the National Assembly's Political Affairs Committee audit, responding to questions from ruling and opposition lawmakers regarding the 'sale of Daewoo Construction.'

Earlier, in July, KDB Investment signed a memorandum of understanding (MOU) to sell 210,931,209 shares of Daewoo Construction to the Joongheung Group consortium. The sale price was approximately 2.1 trillion KRW.

However, political circles and civic groups have continuously raised suspicions of a 'hasty sale' due to the bidding price and contract method. Initially, in the main bid, Joongheung Construction submitted a bid of 2.3 trillion KRW, which was about 500 billion KRW higher than competing companies' bids. They requested an adjustment, and KDB Investment lowered the acquisition price to 2.1 trillion KRW through a private contract.

Typically, under the National Contract Act, when assets are sold, a public competitive bidding process must be conducted. However, KDB signed a contract accepting a loss of 200 billion KRW, sparking controversy over preferential treatment in the sale.

Regarding this, Chairman Lee explained, "The price was adjusted because Joongheung Construction made a revised proposal after media reports indicated their acquisition price was much higher. From KDB Investment's perspective, they had to either consider the revised proposal or invalidate it, and it seems they took the adjustment into account."

He added, "If it was judged that invalidating the contract was unreasonable, then achieving the maximum sale price means the sale of Daewoo Construction was successful."

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