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The People’s Solidarity for Participatory Democracy (PSPD) urged government agencies and local governments to take responsibility for the tin can charter and charter scams that have resulted in large-scale damage, and requested the Board of Audit and Inspection to conduct a public interest audit against the related agencies.
On the 13th, the People’s Solidarity for Participatory Democracy (PSPD) held a ‘press conference for a public interest audit request for canned charter and charter fraud damage’ at the People’s Solidarity for Participatory Democracy (PSPD) in Jongno-gu, Seoul, and announced that it would request a public interest audit for the related organizations. The organizations that the People’s Solidarity for Participatory Democracy requests for audit are △Financial Services Commission △Financial Supervisory Service △Ministry of Land, Infrastructure and Transport △Housing and Urban Guarantee Corporation (HUG) △Gangseo-gu and Gwanak-gu in Seoul and Michuhol-gu in Incheon.
The public interest audit is a system in which a person qualified to file a request for audit to the Board of Audit and Inspection for a specific matter in the event that the public institution’s administrative processing is illegal or unreasonable and significantly harms the public interest. When the Board of Audit and Inspection decides to audit, it must notify the applicant of the result thereof.
The People’s Solidarity for Participatory Democracy said, “We request a public interest audit against the government agency that mass-produced charter fraud and canned houses by neglecting the indiscriminate jeonse loan bubble and excessive guarantee limits, and the Ministry of Land, Infrastructure and Transport and local governments that neglected rental housing management.” As the deposit, which is equivalent to the entire property, was not returned, and caused a huge loss of public funds, a thorough audit should be pursued,” the purpose of the claim was revealed.
In detail, the People’s Solidarity for Participatory Democracy (PSPD) reported to the Financial Services Commission that cheonsei loans should be managed according to the total debt principal and interest repayment ratio (DSR), but that the DSR did not include the cheonsei loans, which was illegal and unjust in handling household loans. He insisted that an audit be necessary.
Regarding the Financial Supervisory Service, △ not taking appropriate measures despite recognizing that the number of loans for deposit funds has increased since 2016 and that they are being used for ‘canned deposits’ △ while the risk burden of financial institutions is low, the risk is transferred to the guarantee institution. They demanded an audit of the failure to take appropriate measures against the sharp increase in loans and △ whether the management of financial institutions with rapidly increasing loans for leasehold deposits was properly carried out.
The People’s Solidarity for Participatory Democracy then pointed out that HUG did not manage the guarantee insurance risk despite recognizing the rapid increase in rental deposit loans. In addition, for the Ministry of Land, Infrastructure and Transport and three local governments, it was revealed that it is necessary to investigate whether registered rental business operators have not purchased guarantee insurance.
Ahn Sang-mi, chairman of the Incheon Michuhol-gu Charter Fraud Damage Countermeasures Committee, argued, “Cheonse fraud is a social disaster caused by failure due to holes in government policy.” Professor Lim Jae-man said, “Even though the necessity of regulating leasehold loans has been continuously raised, the Financial Services Commission and the Financial Supervisory Service neglected it, which aggravated the damage.” Failure to do so constitutes dereliction of duty.”
In the case of ‘Villa Wang Mo’, where enormous damage occurred, 483 out of 1,139 houses were not covered by guarantee insurance, so they are in a difficult situation to recover damages. Attorney Kang-Hoon Lee demanded that the Board of Audit and Inspection “finish the truth through a thorough audit in relation to Gangseo/Gwanak in Seoul and Michuhol-gu in Incheon, which are the local governments under its jurisdiction, and request appropriate measures, such as disciplinary actions and criminal charges against those in charge and those in charge.”
The local governments that the People’s Solidarity for Participatory Democracy announced on this day as targets for audit are Gangseo and Gwanak in Seoul and Michuhol-gu in Incheon. Kim Joo-ho, head of the Socioeconomic Team 1 of the People’s Solidarity for Participatory Democracy, said, “This is because it is an area where large-scale tin housing problems such as charter fraud have occurred recently.” This can happen,” he explained. “The government should not dismiss this as simply a matter between the landlord and the tenant, but should take responsibility,” he urged.
