Ministry of Land, Infrastructure and Transport Requests Investigation of Bomun 5, Daejo 1, and Dunchon Jugong Redevelopment Associations

Results of Joint Inspection Team by Ministry of Land, Infrastructure and Transport... 65 Cases of Non-compliance Detected

The Dunchon Jugong union and the construction business group have agreed on 8 out of 9 major issues. The 8 agreed clauses are ▲ re-verification of the existing construction cost increase ▲ review of the sale price ▲ general sales and union member sales ▲ design and contract changes ▲ verification ▲ general meeting resolution ▲ resumption of construction ▲ effectiveness of the agreement and responsibility in case of violation. However, since there is a disagreement regarding the commercial dispute, more time is expected before construction can resume. A view of the Dunchon Jugong reconstruction site in Gangdong-gu, Seoul, on the 7th. Photo by Moon Honam munonam@

[Asia Economy Reporter Kim Min-young] The Dunchon Jugong Reconstruction Association, Bomun 5 District, and Daejo 1 District Redevelopment Associations will be subject to police investigations.

The Ministry of Land, Infrastructure and Transport announced on the 12th that a total of 65 cases of ineligibility were detected as a result of a joint inspection of three redevelopment and reconstruction associations conducted together with Seoul City from May 23 to June 3.

The Ministry of Land, Infrastructure and Transport and Seoul City formed a joint inspection team and investigated the overall operation status of reconstruction and redevelopment associations, including service contracts, budget accounting, association administration, and information disclosure, together with the Korea Appraisal Board, lawyers, and accountants. The targets of this joint inspection were Dunchon Jugong, Bomun 5 District, and Daejo 1 District.

As a result, 16 cases related to service contracts, 19 cases related to budget accounting, 26 cases related to association administration, 3 cases related to information disclosure, and 1 case related to contractor bidding were detected as ineligible cases.

Among the 65 detected ineligible cases, the Ministry of Land, Infrastructure and Transport and Seoul City plan to request investigation for 11 cases, issue correction orders for 22 cases, recommend recovery for 4 cases, provide administrative guidance for 27 cases, and notify relevant agencies for 2 cases.

Regarding major cases requested for investigation, Association A concluded a total of 13 service contracts, including maintenance infrastructure construction, worth 159.6 billion KRW without passing resolutions on the contractors and amounts at the general meeting.

Under the current Urban Maintenance Act, association executives who proceed with service contracts without general meeting approval are subject to imprisonment for up to 2 years or a fine of up to 20 million KRW.

Additionally, Association B concluded contracts for construction and services, such as relocation promotion services and business services, through private contracts despite the requirement to conduct open competitive bidding.

According to the Urban Maintenance Act, association executives who proceed with service contracts in violation of the open competitive bidding principle may face imprisonment for up to 3 years or a fine of up to 30 million KRW.

Association C indicated in the contractor selection bidding participation guide that the relocation compensation should be proposed at 10 million KRW per household, and both the association and contractors are under investigation as contractors included this in their bidding proposals.

The Ministry of Land, Infrastructure and Transport and Seoul City plan to continue monitoring contractor bidding and association operations in the second half of the year to prevent damage to ordinary citizens caused by unfair practices of reconstruction and redevelopment associations. They also plan to organize inspection results by type to prevent recurrence of similar cases and to promote the establishment of order in the maintenance market.

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