[The Editors' Verdict] LH, Having Lost Public Trust, Does It Still Have a Reason to Exist?

“We will apply strict integrity and ethical standards that satisfy the public to all tasks, faithfully implement innovation plans and our core roles, and transform into a beloved public enterprise.”

The pledge made by Lee Han-jun, President of Korea Land and Housing Corporation (LH), immediately after his inauguration last December, became empty words within just a few months. This was due to the so-called ‘Sunsal Apartment’ incident, where rebar was missing from the ceiling of an underground parking lot. It was not only the rebar, which is crucial for the apartment’s safety, that was omitted. During the process of conducting a full investigation of apartments built using the same construction method and disclosing the results, allegations of statistical omission and concealment arose, and even the personnel reshuffle involving the submission of resignation letters by all seven executives was embroiled in controversy as a ‘cunning resignation’ led by retired executives.

Just two years ago, LH faced a crisis of existence amid public outrage over employees’ land speculation using internal information. At that time, Kim Hyun-joon, then LH President, vowed, “We will undergo a radical transformation through self-reflection that cuts to the bone,” and Byeon Chang-heum, the previous LH President and former Minister of Land, Infrastructure and Transport, ultimately had to resign voluntarily after only 73 days in office due to this issue.

Since then, the Ministry of Land, Infrastructure and Transport announced 67 LH innovation tasks, promising “innovation at the level of dismantling.” LH reduced some organizations and cut personnel, mandated asset registration for all employees, and prohibited real estate acquisition related to their duties. They also introduced a reporting system to prevent inappropriate contact between retirees and current employees, and companies with LH alumni who retired less than five years ago were barred from private contracts.

However, nothing changed. The Sunsal Apartment incident revealed comprehensive failures in contractor selection and supervision throughout multiple stages from design to construction. Among 18 former contractors involved in design and supervision of 16 complexes, including the collapsed underground parking lot in Geomdan, Incheon, LH projects worth a total of 233.5 billion KRW across 77 cases were awarded through non-competitive private contracts over the past three years. One architectural firm, founded by an LH alumnus and still led by an LH alumnus, secured the most contracts, and rebar omissions were confirmed in four complexes designed or supervised by this firm.

The construction industry cartel was identified as a target that must be “definitely dismantled” under the Yoon Suk-yeol administration. In his speech on the 78th Liberation Day, President Yoon emphasized, “Construction cartels that threaten public safety through substandard construction must be thoroughly eradicated.” Minister of Land, Infrastructure and Transport Won Hee-ryong hastily ordered, “LH must completely suspend service contracts with companies employing former LH officials.”

The legal foundation for LH’s establishment states that its purpose is “to contribute to the development of the national economy by improving the housing life of the people and promoting the efficient use of land.” Since land and housing are public goods that form the stable livelihood and economic foundation of the people, its role cannot be lightly entrusted to the private sector. However, merely calling for reform and innovation in words while chronic problems fester only breeds further misconduct and negligence. If internal self-purification efforts are impossible, external forces must be enlisted to excise the rotten parts. Can we really leave a public enterprise that has gone beyond moral hazard to threaten public safety, lives, and property rights as it is?

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