Prosecutors Seek 3-Year Prison Term for Daebang Construction Chairman Koo Kyo-woon and Son on Unfair Affiliate Support Charges

"Over 200 Billion Won in Land Profits" vs "Resale at Legally Permitted Maximum Price"

Court to Deliver Verdict on June 10

Prosecutors have requested a three-year prison sentence for Koo Kyo-woon, Chairman of Daebang Construction, and his son Koo Chan-woo, CEO, who have been indicted on charges of transferring public land at low prices to affiliated companies and funneling enormous profits to them.

At the sentencing hearing held on April 20, 2026, at the Seoul Central District Court Criminal Division 18, presided over by Judge Yoon Youngsoo, prosecutors asked the court to sentence both Chairman Koo and CEO Koo to three years in prison for violating the Monopoly Regulation and Fair Trade Act. For Daebang Construction, which was indicted alongside them, prosecutors sought a fine of 200 million won, taking into consideration the value of the resold land. Prosecutors explained, "The value of the public land that was resold due to this unlawful support amounts to approximately 200 billion won, a very substantial sum. This had a significant impact on market order, including a dramatic rise in the construction capability ranking of the affiliated company Daebang Industrial Development."

According to prosecutors, from 2014 to 2020, Daebang Construction unlawfully supported affiliated companies operated by relatives such as sons-in-law by reselling six parcels of public land valued at approximately 206.9 billion won. Prosecutors allege that, as a result, the affiliated company posted sales of 1.6 trillion won and operating profit of over 250 billion won, with its construction capability evaluation ranking soaring from 228th in 2014 to 77th in 2024, thereby reaping excessive economic benefits.

In the final defense, Daebang Construction cited a precedent involving Hoban Construction, which had a similar structure, to assert its innocence. The attorney for Daebang Construction stressed, "The Supreme Court and the Seoul High Court have already issued final rulings that the resale of public land by Hoban Construction did not constitute unlawful support under the Monopoly Regulation and Fair Trade Act." The attorney added, "The Act on the Promotion of Housing Site Development prohibits resale of public land above the supply price. Daebang Construction transferred the land to its affiliate at the highest price allowed by law (the supply price level), so the very premise that 'excessive profits' were funneled to the affiliate is invalid."

The defense also raised the issue of the statute of limitations. The attorney stated, "Of the six parcels of land cited in the indictment, the statute of limitations has already expired for five, except for the 'Dongtan Land.' Since these cases are no longer legally prosecutable, the indictment should be dismissed." Regarding the Dongtan Land, which is the only one still within the statute of limitations, the attorney argued, "The Dongtan Land, which was resold in March 2020, has only now reached the stage where profits are being realized after four and a half years of complex procedures such as business plan approval and sales. In fact, the project is currently suffering significant losses, so prosecutors' claims that excessive profits were provided or guaranteed at the time of resale are baseless."

In their final statements, Chairman Koo and CEO Koo briefly said, "We hope for a rational and just judgment from the court." The verdict for the first trial is scheduled for June 10, 2026.

Meanwhile, the administrative lawsuit that triggered this criminal trial ended in favor of Daebang Construction. In January 2026, the Seoul High Court sided with Daebang Construction in a lawsuit to cancel the 20.5 billion won fine imposed by the Korea Fair Trade Commission, ruling that "it is difficult to regard a resale within the scope allowed by law as an unlawful act." The Fair Trade Commission accepted the verdict without appeal, making the ruling final.

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