15 Suspected Construction Paper Company Firms Detected in Q3

[Asia Economy Reporter Minyoung Kim] Fifteen companies suspected of being unqualified construction contractors who either failed to meet the minimum criteria required for construction business registration or registered fraudulently have been caught.

The Ministry of Land, Infrastructure and Transport announced on the 12th that from July to September, the third quarter, it conducted intensive crackdowns targeting companies that participated in 187 construction bids issued by affiliated and subordinate organizations to block unqualified construction contractors from winning construction projects.

As a result, 15 companies suspected of being paper companies were identified. The Ministry explained that these companies appeared to fall short of the minimum standards required for construction business registration, such as facilities, equipment, technical capabilities, offices, and capital, or had registered fraudulently.

Furthermore, the crackdown was conducted by directly verifying on-site whether the companies met the standards, even if they met the criteria on paper.

In particular, during this third quarter, a special intensive inspection by the Regional Land Management Office was conducted, significantly increasing the number of crackdowns compared to the second quarter, and the number of companies caught more than doubled to 15.

The companies caught this time have been requested to face administrative sanctions such as business suspension by local governments, and depending on the results of the sanctions, measures such as exclusion from winning bids will also be applied.

According to the Ministry of Land, Infrastructure and Transport, when considering only the third quarter, the number of companies participating in bids per construction project decreased by 34%, and compared to April, when the crackdown began, it decreased by as much as 70%.

This is interpreted as a result of paper companies without construction capabilities giving up on participating in bids due to the burden of continuous high-intensity crackdowns.

Additionally, starting from the fourth quarter, the crackdown target will be expanded from construction projects under 200 million KRW to those under 1 billion KRW, and measures such as sharing crackdown information with ordering institutions will be implemented to enhance the effectiveness of the crackdown.

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