Search and Seizure of Sangdaewon District 2 Cooperative Head in Seongnam... Contractor Selection Faces Difficulties

Attention Focused on Project's Future Amid Contractor Replacement Dispute
Cooperative Head's Home and Office Searched on the 13th
General Assembly to Dismiss Cooperative Head Postponed from the 14th to the 26th

Sangdaewon District 2, considered the largest redevelopment project in Seongnam, Gyeonggi Province, is now facing a "calm before the storm" as the investigation into the head of the cooperative adds another variable. With the upcoming general assembly scheduled for the 26th expected to determine whether the construction contractor will be replaced, attention is focused on the future direction of the project.

Aerial view of Sangdaewon District 2. Provided by Seongnam City Hall

According to the maintenance industry on March 17, the Jungwon Police Station in Seongnam recently conducted a search and seizure of the Sangdaewon District 2 cooperative's office and the cooperative head's residence. It has been reported that this is related to allegations that the cooperative head helped certain partner companies secure material supply rights in the redevelopment process, receiving billions of won in cash and entertainment in return.

The tense atmosphere surrounding the cooperative, including the search and seizure, is largely influenced by the conflict over the potential replacement of the construction contractor. The cooperative's executive board is pushing to switch the contractor to GS Engineering & Construction, but the incumbent contractor, DL E&C, insists on maintaining its current status. The emergency response committee contends that if the cooperative pursues the contractor replacement too aggressively, it could significantly increase the additional financial burden on cooperative members, which is why they argue that the cooperative head should be dismissed. GS Engineering & Construction has proposed a construction cost of 7.29 million won per 3.3 square meters, while DL E&C has set its price at 6.82 million won, with adjustments reflecting inflation rates.

Industry experts believe that the likelihood of replacing the cooperative head has increased as a result of the forced investigation. An industry official commented, "If the search has extended to the head's residence, it means a certain level of evidence has been secured from the initial complaint stage. There is a possibility that the cooperative head could be replaced."

The search and seizure of the cooperative head is expected to be a major variable in the general assembly scheduled for March 26 to vote on the head's dismissal. The assembly, originally planned for March 14, was postponed. There are concerns within the cooperative about the possibility of failing to meet the quorum. According to Article 43 of the Act on the Maintenance and Improvement of Urban Areas and Residential Environments, an extraordinary general meeting to dismiss the head requires a proposal by at least one-tenth of the members and attendance by a majority of the members. For Sangdaewon District 2, at least 1,100 members must be present. The emergency response committee claims the postponement was necessary because the voting rights of cooperative members were not adequately guaranteed.

The Sangdaewon District 2 project is effectively adrift. This project aims to redevelop an area of about 242,000 square meters in Sangdaewon-dong, Jungwon-gu, Seongnam, into 43 apartment buildings with up to 29 stories above ground, totaling around 4,800 households, making it one of the largest maintenance projects in Seongnam. Recently, external factors such as the Middle East conflict have increased cost pressures, further amplifying concerns about project delays.

The Seongnam City government has issued a warning, expressing concern over the growing conflict during the project's progress. The city recently sent an official document to the Sangdaewon District 2 cooperative titled "Guidance on Compliance with Housing Redevelopment and Maintenance Laws and Prevention of Violations," requesting that no additional disturbances occur during the contractor replacement process. The city urged the cooperative to thoroughly review the project to prevent any legal violations from occurring.

The conflict between contractors is also coming to the surface. DL E&C has escalated its response by placing banners at the site with messages such as "No entry for outsiders without approval from DL E&C, the legitimate contractor," and "Land occupied by DL E&C for construction commencement." A company representative stated, "We are monitoring the outcome of the general assembly to dismiss the cooperative head on the 26th. If the motion passes, we are ready to immediately commence construction under the new arrangement." The official added, "If the contract is terminated, we will also consider legal action."

In response, GS Engineering & Construction maintains that the investigation of the cooperative head and the contractor replacement are separate issues. A representative from GS Engineering & Construction stated, "The selection of the contractor is determined by the resolution of the cooperative members' general assembly. The direction of the project will be decided according to the will of the members."

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