Enter 2021.03.21 06:00
In the end, even President Moon Jae-in ordered a thorough investigation and even apologized to the public, but the suspicions still do not subside and are ongoing. We summarized the progress and prospects of the LH crisis, which has emerged as a variable that can change not only the real estate supply policy but also the political landscape in the future.
President Moon Jae-in set up the Prime Minister’s Office as the command tower on the 3rd, just a day after the first suspicion broke out, and gave an order to “conduct a thorough investigation.” However, controversy arose as the first government joint investigation team excluded the prosecutors and auditors who had a conflict with the Moon Jae-in regime and included the Ministry of Land, Infrastructure and Transport. In particular, the Minister of Land, Infrastructure and Transport Byun Chang-heum was the president of LH at the time when LH employees were speculating on the land, so criticism came out that it was “the fish was left to a cat.”
Even after President Moon’s instructions, similar pre-speculation suspicions erupted in a row at the sites of other 3rd new towns such as Changneung in Goyang and Wangsuk in Namyangju, and in the mini new town in Gwacheon. In addition, it was revealed that LH’s overall discipline was revealed, as it was revealed that incumbent employees opened a paid Internet lecture on land auctions. However, the number of suspected speculation revealed as a result of the first round of investigation by the joint corps on the 11th was 20, including 13, as revealed by the participation regiment and Minbyun. The word’complete investigation’ was uncovered and 7 additional people were uncovered. Public opinion began to distrust the government’s willingness to find out the truth.
LH and Minister Byeon also raised their own excommunication. In the internet community, netizens who are believed to have been written by LH employees said, “Is there a law that says, “LH employees don’t invest in real estate.” ),” and so on. Eventually, LH accused them of the police.
In particular, Minister Byeon argued that “LH employees did not purchase land to obtain compensation for new city development information. It is highly likely that after 2025, when regulations on special management areas were lifted, they knew it would be privately developed.” Of course, the ruling party was also criticized for being inappropriate.
As the anger of public opinion spread over such remarks, Minister Byeon expressed his appreciation to President Moon on the 12th, but President Moon said, “We must finish the basic legislative work on measures to supply public-led housing led by Minister Byeon.” In fact, I did. President Moon also announced an apology to the public on the 16th, saying, “I regretted the cause of great concern to the people,” and said, “We will seriously recognize the structure of corruption in our society, refine our posture and take on a heavy responsibility.”
On the 19th, at a high-ranking party, government, and office meeting, he said, “For public officials engaged in real estate-related business, we will review the registration of real estate properties, including local public companies as well as LH.” It is expanding the target of property disclosure, which was conducted only for high-ranking public officials, to local governments, local public officials, and public institutions.
On the same day, the Blue House also raised doubts about speculation. It was revealed that the chief of the Blue House presidential security department, who had an older brother working for LH, purchased 413㎡ of land in the third new city area in cooperation with his brother’s spouse and other family members around September 2017. On the same day, in the announcement of the second investigation by the government, an additional 28 public officials and public corporation employees who made land transactions in the third new town and adjacent areas were detected.
◇ Experts “The 3rd new town seems to be opening and departing…LH dismantling theory is premature.”
Although the government is conducting a thorough investigation of employees of the Ministry of Land, Infrastructure and Transport, local governments, and LH, it is not enough to subdue the anger of the burning public opinion. In the news related to the LH crisis, comments such as “The real estate surged, taking the general public’s blood, and spreading it to LH” are receiving support. A thorough investigation result is needed in order to eradicate such disbelief.
In particular, in order to properly disclose allegations of speculation by LH and development-related ministries, not only employees, but also family, acquaintances, and relatives must be investigated, but there is no clear plan for this.
City and Economy Representative Song Seung-hyun said, “During the speculation, there will be speculation by the name of the second name,” he said. “If the split-stake technique was used, it would be more complicated by including relatives and relatives. We have to take this part into account,” he said. However, it is reported that the Joint Special Investigation Headquarters (special edition), which was in charge of the full investigation following the joint group, expressed difficulties because it did not have the authority and manpower to investigate relatives, relatives, or retirees.
Given the circumstances, the public is showing a cynical reaction to the government’s investigation results as well as the will to investigate. Mr. Oh, 36, an office worker living in Seoul said, “The government, which has been investigating political matters beyond the boundaries of the law, has no authority over LH.” Maybe it’s because they have collusion,” he said. One netizen, who is believed to be an LH employee, said, “I heard that politicians and lawmakers have done better than executives in the company,” and said, “It seems to be trying to kill only LH in order to divert attention.”
As the ripple effect from the LH has increased, the real estate market is also paying close attention to the direction of the 3rd new city. The government has announced that it will proceed so as not to disrupt the schedule of the 3rd new city, but there are many observations that it will be difficult for the 3rd new city, which promised to move in in 2025, to make a shovel in time unless the speculation issue is firmly fixed. However, it will take quite a while to sort out the speculation of the second name and the speculation of relatives and relatives.
Experts also come up with the prospect that the 3rd new town will begin opening. “If the 3rd new city schedule changes, the public can suffer damage,” said Ko Jun-seok, adjunct professor at Dongguk University’s Graduate School of Law. “It is correct to proceed as planned.”
Lee Eun-hyung, a senior researcher at the Korea Institute for Construction Policy, said, “The only supply options that the government can present are urban high-density maintenance projects and new housing site development. The new city will proceed.” He said, “In the case of new cities in Gwangmyeong and Siheung, there is no sunk cost, as the situation has not yet been properly progressed, so you have to think about how to cancel it even in order to set a precedent for’follow the principles’.”
However, many experts are concerned about the hasty dismantling theory. Shim Gyo-eon, a professor at Konkuk University’s Department of Real Estate, said, “It takes 6 months for a general company to conduct a survey, but it is very dangerous to immediately dismantle the world’s largest housing company with sales of around 30 trillion won. From the people’s point of view, it is necessary to prepare a’process (process)’ to think about what will benefit from a zero base and collect public opinion. However, he also said, “Ultimately, a competitive structure will be needed.”
“The essence is private use of information, conflict of interest, not the LH organization itself,” said Eun-hyeong Lee, a researcher. He said, “A hasty transfer of local governments can be more exposed to corruption and collusion, and if it is handed over to the private sector, it can be more faithful to private interests.” “You have to induce the organization to compete.”
Experts say that this incident is in danger of destroying trust in the public. An expert who requested anonymity said, “The Moon Jae-in administration has been targeting multi-homed people and non-living residents as’real estate deposits.’ “The trust in the real estate regulation policy has broken,” he said. CEO Song Seung-hyun said, “The LH crisis could lead to disruptions in the overall government project as public opinion distrusted about public intervention, such as public lease and public reconstruction.”