GS Construction to Take Legal Action Against Business Suspension Over Geomdan Collapse Accident

Ministry of Land 8-Month and Seoul City 1-Month Business Suspension
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Responding with Suspension of Execution Request and Administrative Disposition Cancellation Lawsuit

GS Construction has decided to take legal action against the business suspension orders issued by the Ministry of Land, Infrastructure and Transport (MOLIT) and the Seoul Metropolitan Government in relation to the underground parking lot collapse accident at an apartment complex in Geomdan, Incheon.

[Image source=Yonhap News]

On the 1st, GS Construction released a statement saying, "As the contractor, we deeply regret the incident and once again sincerely apologize to our customers, shareholders, and the public." They explained, "Despite our explanations, the business suspension orders did not reflect the contractor's opinions at all, leaving GS Construction no choice but to respond legally."

Through a public disclosure, GS Construction announced, "We plan to respond by filing for a suspension of execution of the administrative disposition and a lawsuit to cancel the administrative disposition." If the suspension of execution application for the business suspension order is accepted, GS Construction will be able to continue its business activities until a ruling is made on the cancellation lawsuit.

GS Construction received a total of 10 months of business suspension orders from MOLIT and the Seoul Metropolitan Government. This administrative disposition relates to the underground parking lot collapse accident that occurred last April at the construction sites of blocks AA13-1, section 5, and AA13-2, section 6 in Geomdan, Incheon, which GS Construction was responsible for constructing.

After receiving prior notification of the business suspension order from MOLIT and the Seoul Metropolitan Government last year, GS Construction underwent hearing procedures with both entities in December. GS Construction submitted additional statements and explanations during the January hearings, but since these were not reflected, they decided to pursue legal action.

GS Construction stated, "We regard the trust and honor of the Xi brand as our highest value. Reflecting the opinions of prospective residents, we decided on a full reconstruction, have already completed compensation negotiations for the delayed move-in, and are currently executing compensation." They added, "Since the Geomdan accident, we have prioritized quality and safety above all, conducting intensive reforms including quality improvement and safety inspection activities."

GS Construction said, "We will take this accident as an opportunity to regroup and advance the Xi brand to a level that is truly loved."

[Image source=Yonhap News]

On the same day, MOLIT imposed an 8-month business suspension order on GS Construction, Dongbu Construction, and three other companies, citing serious structural damage caused by poor construction. The 8-month suspension is the highest level of administrative penalty that MOLIT can impose under the Framework Act on the Construction Industry and its enforcement decree for poor construction where no fatalities occurred.

The day before, the Seoul Metropolitan Government issued a 1-month business suspension order on GS Construction starting in March, due to inadequate quality management. Seoul plans to conduct a hearing next month regarding the business suspension related to "insincere safety inspections" and may take additional measures. Previously, MOLIT requested Seoul to impose a 2-month business suspension for two cases of insincere quality testing and safety inspections.

During the business suspension period, GS Construction is prohibited from engaging in construction business activities such as participating in bids related to civil engineering and architectural construction. However, construction projects for which contracts were signed before the administrative disposition or projects that have received permits and approvals under relevant laws may continue construction.

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