While the so-called LH land profiteering scandal has snowballed into an extensive corruption case, there is suspicion that similar confidential information leaks may have occurred among public servants and state-run developer employees in other redevelopment cases.
The issue is also seen as a landmark challenge for the Moon Jae-in administration, which has struggled for years to stabilize the real estate market -- to little avail.
The city of Gwangmyeong has confirmed that five more of its affiliated public servants purchased land in Gwangmyeong or Siheung ahead of the government’s new town development plan announcement there, Gwangmyeong Mayor Park Seung-won said Wednesday.
The city’s investigation followed allegations that employees of the state-run Land & Housing Corp. used classified information to buy about 10 billion won ($8.75 million) worth of farmland in the area from April 2018 to June 2020.
The issue immediately provoked public outrage, as skyrocketing housing costs have been a major hurdle for the Moon Jae-in administration.
Responding to the market turbulence, Moon repeatedly called for a thorough probe, as well as continued efforts to supply new homes -- apparently denying the assumptions that the government’s new town blueprint may lose momentum amid the corruption scandal.
The ruling Democratic Party of Korea, however, hinted that the government may have to consider the possibility of retracting the development road map altogether, if necessary.
“Should the corruption turn out to be extensive beyond control, we should consider such scenario,” said Rep. Hong Ik-pyo, chief policymaker of the party, during a radio interview early on the day.
On Tuesday, the Gyeonggi Nambu Police Agency sent officials to the LH headquarters in Jinju, 434 kilometers southeast of Seoul, to secure evidence of any problematic transactions.
Some of the LH officials in question were found to have kept maps with detailed development information, in an apparent attempt to share the confidential information with their families.
Besides those within LH, other public land-related institutions and local governments also came under fire for alleged involvement in speculative land buying.
According to the Korea Real Estate Board’s statistical information system, the land transaction volume in Incheon’s Gyeyang-gu reached a record high of 336 units in November 2018, more than quadruple the conventional monthly average.
A month later, the Ministry of Land, Infrastructure and Transport announced the plan to build Gyeyang Techno Valley, an extensive new town to accommodate some 17,000 households in the area.
The unusual figure triggered speculation about confidential information leaks, as the project was largely seen as unexpected. The Gyeyang Techno Valley had initially kicked off as a local government project to add residential zones to the already existing industrial complexes, not as part of the central government’s new town blueprint.
Similar preemptive land purchasing phenomena were observed in the new town zones of Hanam, Namyangju, Bucheon and Goyang -- all in Gyeonggi Province.
“It is unacceptable that public servants or employees of public land developing institutes should take advantage of the related confidential information to speculate on real estate,” said President Moon Jae-in during a meeting with ruling party representatives at Cheong Wa Dae.
This was the first time that the state chief officially addressed the seriousness of the issue in open audience.
By Bae Hyun-jung (firstname.lastname@example.org