SEOUL, June 07 (Yonhap) – The state-owned Korea Land & Housing Corp. (LH) will streamline its structure and focus on its core housing assistance services to prevent land speculation by its employees and tackle public mistrust following a scandal, the scandal said on Monday. Ministry of Land, Infrastructure and Transport
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The ministry announced comprehensive reform measures three months after the revelation of speculative land purchases by several LH employees rocked the country amid soaring house prices.
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The case sparked a series of complaints about suspicious land deals involving officials and politicians nationwide, which even undermined public confidence in the Moon Jae-in administration’s real estate policy.
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“The government concluded (the LH land speculation scandal) as a structural problem caused by monopoly power, an inflated structure and a lax internal control system,” the ministry said in a statement. “The overhaul measures are aimed at transforming LH into a transparent company that can earn the trust of the public.”
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LH was formed as a giant state-owned enterprise in 2009 by merging a state-owned real estate developer and a public housing company, now with nearly 10,000 employees and 185 trillion won ($ 163.2 billion) in assets under management.
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While the public developer is responsible for the government’s land use planning, housing supply plan and housing-related social projects, the Ministry of Land will choose new sites for the development plans in order to avoid a related information leaked to LH employees.
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The ministry said it would disperse LH’s non-core functions to other organizations and downsize, with the goal of reducing them by more than 20 percent, or 2,000 employees, in line with the company’s restructuring.
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The state-owned company will also require all employees to register their assets and be prohibited from purchasing land except for actual livelihood purposes.
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The ministry said the ruling party and those in the opposition were discussing the separation of its functions of land development and housing provision, as well as the creation of a holding company to oversee its subsidiaries, adding that ‘he will confirm the projects after having gathered the opinions of the various circles.
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The company’s restructuring proposal requires parliamentary approval to enter into force.
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The Moon administration has pledged to increase the supply of housing in the Seoul metropolitan area and other major cities in order to stabilize the overheated real estate market, in a radical departure from the imposition of a series of more stringent regulations over the past three years.
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Market watchers fear that the ambitious procurement plan focused on the development of large housing sites and urban redevelopment will struggle to win the support of landowners and existing residents due to growing mistrust of landlords. projects involving public developers.
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Rising house prices and tough lending rules have made it more difficult not only for low income families but also for high income earners to buy a house in Seoul without the financial support of their parents.
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