Gangwon-do Dismisses Song Sang-ik's Claim as "Inconsistent and Illogical"

Song Sang-ik, GJC CEO, "Almost No Communication Since New Provincial Government"
Ha Seok-gyun, Provincial Assembly Member, Raises Suspicion That GJC Sold Land to Specific Company Below Official Price

[Image source=Yonhap News]

[Asia Economy Reporter La Youngcheol] Gangwon Province has dismissed as "untrue" the claims made by Song Sang-ik, CEO of Gangwon Jungdo Development Corporation (GJC), through the media regarding the 'GJC rehabilitation application.'

Regarding Song's assertion in an interview with a certain media outlet on the 1st that "there was almost no communication since the new provincial administration took office," the province stated on the 2nd that "his statements are inconsistent."

The province pointed out, "Unlike other affiliated organizations, GJC did not comply despite multiple prior requests for reporting from the province. It only responded to Gangwon Province's work report after a formal letter requesting cooperation was sent under the directive of the Deputy Governor for Economic Affairs at the end of July."

It added, "GJC has only requested confirmation from Gangwon Province when funds were actually disbursed, without providing specific reports on the fund execution plans."

Furthermore, "The credibility of the financial balance data reported by GJC to the province is low. In the 2021 financial statement audit report, the auditing accounting firm issued a qualified opinion, and GJC also refused to submit financial documents such as bank transaction details requested by the province," it revealed.

In particular, "There has been no consultation with Gangwon Province on timely repayment plans for unpaid amounts, including the 13.6 billion KRW due for the completion payment of the Legoland infrastructure construction to Dongbu Construction," it stated.

The province also refuted Song's claim that "If the current situation continues until November next year, there will be a shortfall of 41.2 billion KRW."

According to the province, "As currently understood, GJC's revenue sources are nonexistent except for land sale proceeds, and the land sale payments are not being properly received. The business structure is such that debt is inevitably expected to increase."

However, "As CEO Song Sang-ik mentioned in the interview, the land sale proceeds have not been received due to issues such as ownership arrangement. The province has repeatedly requested GJC to submit various documents for detailed situation assessment and resolution discussions but was refused," it disclosed.

Song also claimed, "We need to organize the land registry. Cooperation between the province and Chuncheon City failed in that regard. Because the land registry was not organized, we could not conduct the completion inspection, and buyers could not obtain building permits, making it impossible to borrow money from the market."

Regarding this, Gangwon Province said, "This claim reverses the cause and effect completely," explaining, "Land registry organization is only possible after the newly organized ownership alignment is completed."

The province pointed out, "GJC should have first faithfully carried out the development project and then proceeded with ownership arrangement for land registry organization before requesting Chuncheon City for land registry organization."

It added, "GJC did not actively fulfill efforts to meet the requirements for land registry organization. Rather, despite Gangwon Province actively assisting in problem-solving, shifting the responsibility for land registry organization to the province and Chuncheon City by claiming 'lack of cooperation between the province and Chuncheon City' is groundless," it dismissed.

The province also refuted Song's claim that "From GJC's standpoint, cost reduction is natural. In 2020, the lending institution was changed from Korea Investment & Securities to BNK Investment & Securities, and efforts were made to significantly reduce debt by re-contracting land that was previously sold under unfavorable conditions."

It revealed, "On March 24, GJC notified at a current issues meeting with then-Gangwon Governor Choi Moon-soon that 'a 1200% performance bonus would be paid to employees,' and on March 28, without disclosing specific amounts, GJC verbally informed the province that 'a first payment of 300% performance bonus was made.'"

It explained, "Not only the specific amount of the '300% first performance bonus payment' but also all performance bonus payment details before and after remain undisclosed by GJC, making it impossible to verify."

On the 21st of last month, at the 5th plenary session of the Gangwon Provincial Council (regular session), Assemblyman Ha Seok-gyun raised suspicions, stating, "The 19 plots totaling 14,090㎡ sold by GJC in March are worth 10.544 billion KRW based on official land prices, but it is estimated they were sold to a specific company for 5.97 billion KRW."

In response, the province demanded a detailed explanation from GJC.

The province also stated, "In 2020, GJC changed the lending institution from Korea Investment & Securities to BNK Investment & Securities citing a decrease in interest rate (from 3.7% to 3.1%), but BNK raised the interest rate to the 5% range the following year."

Regarding the historic park construction plan, CEO Song claimed, "It is appropriate for GJC to handle it, but since there is no money and it is a public interest matter, there was talk of the province taking charge. The province attempted to secure a budget but there was no outcome."

In response, the province stated, "The historic park and museum are to be promoted by GJC, and judging from the interview content, CEO Song Sang-ik is fully aware of this. We confirmed that the construction costs for the historic park and museum were omitted from the 'expenditure' items in the financial balance data submitted by GJC to the province."

It added, "Based on such data, Song's claim that 'there will be a shortfall of 41.2 billion KRW by November next year' lacks credibility."

Gangwon Province promised, "We will take all possible measures to normalize the management of Gangwon Jungdo Development Corporation (GJC) with a sense of responsibility for the proper use of residents' taxes and the stability of the financial market."

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