(2nd LD) Police investigate interior minister's ex-aide over property speculation allegations

All News 21:59 March 29, 2021

(ATTN: UPDATES with latest development in paras 9-12; ADDS photo)

SUWON, South Korea, March 29 (Yonhap) -- Police have begun investigating a former aide to Interior Minister Jeon Hae-cheol over allegations that he and his family were involved in a speculative land purchase.

A probe team of Gyeonggi Nambu Police Agency raided five places, including the Ministry of Land, Infrastructure and Transport and the headquarters of the Korea Land and Housing Corp. (LH) in Jinju, South Gyeongsang Province, in connection with the allegations.

The raids came after the wife of the minister's former aide, whose identity was not made public, was reported to police for alleged violations of the Farmland Act.

The 51-year-old woman is suspected of illegally buying land in Ansan, south of Seoul, by taking out excessive loans that amounted to 70 percent of the purchase money, a month before the development-restricted area became freed for constructing new towns there.

Police officers move a box of items they seized during a search of the city hall of Ansan, south of Seoul, on March 29, 2021, as part of investigation into a suspicious land purchase by the wife of a former aide to Interior Minister Jeon Hae-cheol. (Yonhap)

Soon after the allegations were made, the aide was relieved of his post for "health reasons."

Dozens of public sector workers are currently under investigation following allegations that employees of the state housing developer, Korea Land and Housing Corp. (LH), used insider information to purchase farmland in areas that were later designated as public housing development sites.

A government probe team overseeing all speculation cases prompted by the scandal is currently investigating a total of 536 people, including 102 former and current public servants and 32 LH employees, a senior official of the team said.

The scandal has rocked the nation at a time when public discontent over soaring home prices is running high.

A district court in Uijeongbu, north of Seoul, issued an arrest warrant late Monday for a senior official of the Pocheon municipal government, 46 kilometers north of Seoul, over suspicions he used classified information to purchase land and a building near the site of a train station ahead of its construction.

It was the first issuance of an arrest warrant in a widening investigation into property speculation by public workers around the country.

The official bought about 2,600 square meters of land and a one-story prefabricated building near the site of a train station due to be constructed along an extended subway line.

He and his wife jointly made the purchase in September after taking out some 4 billion won (US$3.5 million) in loans. He is said to have denied any wrongdoing.

A senior official of the Pocheon municipal government arrives at the Uijeongbu District Court to attend his arrest warrant hearing in Uijeongbu, Gyeonggi Province, on March 29, 2021. (Yonhap)

A civic group raised more suspicions against retired LH officials, saying that they worked as lobbyists for local construction companies seeking to win lucrative contracts from the state housing developer.

The Citizens' Coalition for Economic Justice released the results of an analysis of hundreds of contracts issued by the LH from 2015-2020 and found that some 90 LH retirees were hired by 47 construction companies during that period, when the companies landed 297 private contracts, or 55.4 percent of the total. The orders were worth 658 billion won (US$581 million), 69.4 percent of the total. Among the 10 biggest contracts, the companies won seven.

The companies also won 115 out of 290 state-issued bidding cases, valued at 385.3 billion won.

The civic group called for disbanding the housing developer, as its employees focus on land and property speculations while in office and they allegedly use their connections to continue unethical behavior even after retirement.