LH Violates Internal Rules by Purchasing Housing for Employees' Families... 'Light Disciplinary Action' Despite Regulation Breach

2021 Internal Audit Results
Violation of Internal Rule 'No Purchase of Houses Owned by Employees or Their Families'
Despite Last Year's LH Scandal, Minor Penalties Still Predominate

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[Asia Economy Reporter Kwon Hyun-ji] The Korea Land and Housing Corporation (LH), which has been repeatedly criticized for lax discipline, has now been found to have violated internal regulations by purchasing a house owned by an employee's family member. LH conducts a business of buying old houses, remodeling them, and then selling them, but it is prohibited from purchasing houses owned by employees or their families. However, LH did not verify whether the house was owned by an employee during the purchase process.

According to the internal audit report submitted to Rep. Lee Jong-bae of the People Power Party, a member of the National Assembly Land, Infrastructure and Transport Committee, LH purchased an old house owned by the father of employee A last year. LH's internal regulations related to purchase operations prohibit buying houses owned by employees or their families, but this rule was violated. Employee A heard from his father about the contract with LH but did not report it to the purchasing officer.

There is another case of regulation violation. Employee B's spouse and her mother jointly participated in a bid for LH single-family residential land, won the bid, and then signed a sales contract with LH. LH's internal employment rules prohibit employees' spouses, parents, children, and other family members from participating in joint bids, which was violated in this case.

However, all those involved, including employees A and B, who failed to verify these facts, received only a mild disciplinary action of a 'reprimand.'

It was also discovered that employee C, a grade 6 manager, signed a private contract with a company represented by his own family member. This violates the code of conduct for executives and employees, which prohibits employees and their families from entering into private contracts with the corporation. However, the disciplinary action against C was limited to a 'three-month suspension.'

According to Alio, a public institution management information system, the number of mild disciplinary cases such as reprimands and salary reductions at LH surged from 29 cases in 2020 to 75 cases last year.

Rep. Lee stated, "Despite last year's LH scandal, the internal control system remains weakened," and pointed out, "Since the lax discipline due to LH protecting its own staff is serious, measures to prevent recurrence, such as strengthening the level of disciplinary action upon detection, must be prepared."

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