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[Newsmaker] Police raid land ministry over mounting LH scandal

This image shows the Ministry of Land, Infrastructure and Transport located in the administrative capital of Sejong, some 120 kilometers south of Seoul. (Yonhap)
This image shows the Ministry of Land, Infrastructure and Transport located in the administrative capital of Sejong, some 120 kilometers south of Seoul. (Yonhap)
Police conducted raids on Wednesday into multiple places, including the land ministry, in a widening investigation into alleged land speculation by employees of a state housing developer.

Gyeonggi Nambu Police Agency has sent investigators, 33 in total, to the Ministry of Land, Infrastructure and Transport in the administrative capital of Sejong, some 120 kilometers south of Seoul.

The raid is said to be aimed at corroborating allegations that employees at the Korea Land and Housing Corp. (LH), an affiliated organization of the land ministry, had obtained information about a state-led real estate development project prior to land purchases in the two cities.

The search operations have also been conducted at six other locations, including the LH headquarters in Jinju, South Gyeongsang Province and a branch of Nonghyup Bank in Siheung suspected of providing loans to LH officials for land purchases.

A day earlier, Gov. Yoon Suk-heun of the Financial Supervisory Service ordered a probe into the branch to see if there has been any malpractice in the approval process of real estate loans.

Siheung and Gwangmyeong, both south of Seoul in Gyeonggi Province, are at the center of a massive scandal sparked by the allegations of land speculation by LH employees.

The raid into the LH headquarters took place for the second time since March 9.

Twenty LH officials are currently under investigation on suspicion of using insider information to purchase farmland mainly in the two cities before the central government designated it as a major public housing development site last month.

The alleged land speculation by public sector employees has rocked the nation as it emerged at a time when public discontent over soaring home prices is running high.

President Moon Jae-in apologized Tuesday for troubling the nation over the case, which two civic groups, People's Solidarity for Participatory Democracy (PSPD) and Minbyun, an association of progressive lawyers, brought to light two weeks ago.

During a press conference in the morning, the two civic groups said they have found dozens more suspected land transactions in Siheung.

According to their findings, there have been around 30 cases of suspected land speculation activities in the city, taking place from 2018 until the end of February.

In nine cases, people who bought plots of land there purportedly for farming turned out to live too far away to engage in daily farming. In 18 cases, the buyers took out excessive loans for the purchases, raising suspicions over the legality of the process. There were also several cases where plots of farmlands remained unused, or were used for non-farming purposes after transactions took place.

"Many of the informants are farmers who have been working in that area for the past 30-40 years," Kim Joo-ho, a PSPD official, said during the press conference.

"The government should see the anger of the farmers there and conduct a thorough investigation," he said, noting that many "outsiders" turned out to have bought up pieces of farmland allegedly for speculative purposes, resulting in a hike in real estate prices.

Meanwhile, the interagency probe team led by the police, which was launched last Wednesday, said it was investigating 198 people, including public servants and ordinary people, in 37 cases in connection with the scandal, jumping from around 100 people in 16 cases from Friday.

The team started running a hotline on Monday to receive tips on suspected land speculation and has logged 182 reports since.

An interagency government task force in charge of dealing with the LH scandal also held a meeting and decided to prevent the alleged LH employees from benefiting from unfair gains.

To this end, Choi Chang-won, vice minister of government policy coordination at the prime minister's office leading the task force, said the government will conduct a survey of the land in question on Thursday as part of a process of executing forced sales of the properties. (Yonhap)