Despite Chung Mong-gyu's Resignation, Angry Public Sentiment: "Only Eager to Avoid Responsibility," Crisis Management Remains Difficult

Stepped Down as Hyundai Development Company Chairman but Retains HDC Group Chairmanship
Mentioned 'Complete Demolition and Reconstruction' but Safety Inspection is Conditional
Numerous Challenges Including Demolition and Compensation Scope... "Last Year's Accident Still Unresolved"

Jung Mong-gyu, chairman of HDC Group, who has faced public criticism for a series of major collapse accidents in Gwangju, is making a public apology and announcing his position regarding his future at the HDC Hyundai Development Company Yongsan headquarters in Seoul on the 17th, concerning the collapse accident of the outer wall of Hwajeong I-Park in Seo-gu, Gwangju. Photo by Kang Jin-hyung aymsdream@

Jung Mong-gyu, chairman of HDC Group, resigned from his position as chairman of HDC Hyundai Development Company on the 17th, taking responsibility for the series of construction site collapses in Gwangju, but public anger has not easily subsided. In particular, there is no clear outline of how the measures proposed by Chairman Jung to manage the situation will proceed, and the suffering of victims and prospective residents is expected to continue.

On the same day, Chairman Jung held a press conference at the Yongsan headquarters, saying, "I bow my head and deeply apologize to the families of the victims of the Gwangju accident and the public," and announced, "I will step down from the position of chairman of HDC Hyundai Development Company." This is the second resignation since the redevelopment disaster in Hakdong, Gwangju, last June, and it comes six days after the accident on the 11th.

Chairman Jung stepped down as CEO of Hyundai Development Company in 2018 when the group transitioned to a holding company system, but he retained the chairman position and continued to be involved in the management of Hyundai Development Company. Now, he intends to relinquish that position as well. This appears to be based on the judgment that the chairman must take direct responsibility to restore the trust lost due to the successive collapse accidents.

Jung Mong-gyu, chairman of HDC Group, who has faced public criticism for a series of major collapse accidents in Gwangju, is making a public apology and announcing his position regarding his future at the HDC Hyundai Development Company Yongsan headquarters in Seoul on the 17th, concerning the collapse accident of the outer wall of Hwajeong I-Park in Seo-gu, Gwangju. Photo by Kang Jin-hyung aymsdream@

However, despite Chairman Jung's resignation and the announcement of countermeasures, public outrage has not subsided.

While resigning from the position of chairman of Hyundai Business Group, Jung stated, "I will fulfill the responsibilities of the major shareholder." He plans to retain his position as chairman and CEO of the holding company HDC. It is widely believed that, as the top of the group’s governance structure, he will inevitably be involved directly or indirectly in the management of Hyundai Development Company. This is why there are criticisms that this resignation is merely a 'formal resignation.'

Recently, the Gwangju city government and residents at the accident site have demanded that Hyundai Development Company "completely demolish and reconstruct" the buildings.

On the day, Chairman Jung said, "We will consider contract cancellations with prospective buyers as well as complete demolition and reconstruction," but added the caveat, "if there are problems found in the structural safety inspection." This means that such measures will only be considered if safety inspections reveal issues.

Even if safety problems are found, industry observers believe that it will be practically difficult to speed up the process of complete demolition and reconstruction.

Hyundai Development Company received sales guarantees from Korea Housing Guarantee and construction guarantees from the Construction Guarantee Association for apartment sales, but it was revealed that they did not subscribe to construction insurance from private insurers to cover accidents like this.

Considering the costs of demolishing complexes that have reached the completion stage and reconstruction expenses, Hyundai Development Company is expected to bear costs amounting to several hundred billion won. It is highly likely that they will pursue a direction of localized reconstruction only in areas where safety issues are found.

On the other hand, some prospective residents are requesting the demolition of the entire complex, citing safety concerns and distrust. There is also the unresolved issue of compensation for damages, the scope of which is difficult to even estimate. A prolonged legal battle is highly likely. The redevelopment disaster in Hakdong, Gwangju, which occurred last year, has yet to be resolved. This is the background for criticisms that Chairman Jung’s official apology after six days is insufficient in many respects.

Jung Mong-gyu (center), chairman of HDC Group, who has faced public criticism for a series of major collapse accidents in Gwangju, is greeting before making a public apology and statement regarding his position on the collapse accident of the outer wall of Hwajeong I-Park in Seo-gu, Gwangju, at the HDC Hyundai Development Company Yongsan office in Seoul on the 17th. Photo by Kang Jin-hyung aymsdream@

The families of the missing persons at the Hwajeong I-Park collapse site responded to Chairman Jung’s resignation announcement by saying, "He is trying to evade responsibility." They expressed strong reactions, saying, "Take responsibility rather than apologize," and "He should not step down but take responsibility for resolving the situation and receive appropriate punishment."

The Hwajeong I-Park prospective residents’ council and emergency response committee issued a statement at the accident site on the morning of the same day, saying, "Chairman Jung Mong-gyu’s resignation appears to be a trick to avoid punishment under the Serious Accident Punishment Act scheduled to take effect on the 27th," and added, "It is proper to resign only after legally taking managerial responsibility."

They continued, "All Hyundai Development Company has done is to avoid responsibility by explaining that they did not pressure for construction deadlines immediately after the accident and hiring Kim & Chang, the largest law firm in Korea," and demanded, "Prepare a detailed and convincing plan for the safe and certain completion of Hwajeong I-Park, disclose it to prospective residents, and prepare and implement a reasonable compensation plan responsibly."

Furthermore, they stated, "Without the precondition of safety inspection results, take full responsibility for the Hwajeong-dong I-Park collapse accident by demolishing and reconstructing the entire 1st and 2nd complexes," and added, "Establish and disclose to the entire nation a safety management compliance plan for all stages of construction, including design, construction, and supervision."

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