Seoul City Imposes Additional 8-Month Business Suspension on HDC Hyundai Development Company for 'Gwangju Hakdong Accident'

by Kim Minyoung

Published 13 Apr.2022 14:45(KST)

Responsibility for Gwangju Hakdong Demolition Building Collapse... Hyundai Development Company Suspended from Business for a Total of 16 Months

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] On the 14th, the Seoul Metropolitan Government announced that following the 8-month business suspension imposed on HDC Hyundai Development Company (Hyundai Development) in relation to the Gwangju 'Hakdong Demolition Building Collapse Accident,' an additional 8-month business suspension was imposed for 'violation of subcontractor management obligations.' As a result, Hyundai Development will face a total administrative penalty of 1 year and 4 months due to the Gwangju Hakdong demolition building collapse accident.

Earlier, on March 30, the city had imposed an 8-month business suspension for poor construction practices. Subsequently, after receiving the administrative penalty notification from Yeongdeungpo District Office regarding the violation of the prohibition on re-subcontracting, the city decided to impose an additional 8-month business suspension for 'violation of subcontractor management obligations.'

The city explained that Hyundai Development, which should have managed the subcontractor Hansol Enterprise to prevent illegal re-subcontracting, was found guilty of conspiring to carry out illegal re-subcontracting, resulting in the penalty for 'violation of subcontractor management obligations.'

During the business suspension period, business activities such as bidding participation as a construction company are prohibited; however, construction projects for which contracts were signed before the administrative penalty or for which permits were obtained according to relevant laws and regulations may continue construction.

Han Je-hyun, Director General of Safety at the Seoul Metropolitan Government, stated, "The Gwangju Hakdong demolition collapse accident was a tragedy caused by inadequate safety management while re-subcontracting. Illegal subcontracting is a serious factor threatening safety at construction sites and must be improved. We will actively work to eradicate illegal subcontracting to prevent such unfortunate accidents from happening again and will strictly hold accountable those responsible for any wrongdoing."