Employees who came from the Korea Land & Housing Corporation (LH) and were at the center of the 2023 "rebar omission" scandal are still working in related industries and winning LH projects. The total value of projects won over the past year by companies where they work exceeds 800 billion won.
According to Rep. Jeong Jun-ho of the Democratic Party of Korea on the Land Infrastructure and Transport Committee, who examined LH's retiree status system on the 14th, 483 LH retirees are employed at 91 companies that have won LH projects since Oct. last year. Over one year, these companies won 355 projects worth 809.6 billion won.
Since its launch in 2009, LH has had 4,700 retirees. The annual average number of retirees is about 270. Fully 10% of all retirees are employed at companies that won LH projects over the past year alone.
In Apr. 2023, a collapse occurred at the underground parking lot of an apartment complex in Wondang-dong, Seo District, Incheon, where LH was the developer and a GS Engineering and Construction consortium was the builder. The apartment used a flat slab structure in which columns directly support the slab (ceiling) without girders (beams). For the flat slab structure, LH designed the building with shear reinforcement bars (rebar) embedded at the top of the columns, but at this site, the rebar was omitted during construction, resulting in shoddy work that led to the accident.
After the accident, LH inspected columns in underground parking lots using the flat slab structure across LH apartment complexes nationwide and found rebar omissions at 20 out of 102 complexes. To prevent such incidents, LH established a retiree registration system in Oct. to identify where retirees are employed among related companies and impose disadvantages in bidding. However, LH retirees already employed at these companies before the system was created did not fall under the criteria for companies subject to bidding disadvantages.
Under the Public Service Ethics Act, LH defines as former high-ranking insiders those who are within three years of retirement, at grade 2 or above at retirement, or serving as executives or higher at the relevant companies. After three years from retirement, they effectively fall outside the management net.
Companies sanctioned for unfair practices with penalty surcharges or business suspensions have reportedly appealed the sanctions and are still securing LH projects. According to Rep. Jeong, among 20 architecture firms recently fined 23.7 billion won by the Fair Trade Commission for bid rigging, three employ 38 former LH staff.
Specifically, Company A, which received a business suspension for incidents including the Incheon Geomdan apartment underground parking lot collapse and the Gwangju Hwajeong I-Park collapse, employed 26 former LH staff. All hold senior posts at or above current Director General level, and more than 10 are executives such as vice presidents, managing directors, and senior managing directors. At Company B, which played a leading role in a supervision bid-rigging scheme and was hit with a 3.1 billion won penalty surcharge, 10 former LH high-ranking insiders were identified.
Rep. Jeong said, "Even though LH's public role has been further strengthened by shifting to direct project implementation, its commitment to reform remains insufficient," adding, "As the LH Reform Committee is discussing institutional improvements through the end of the year, a full audit of companies involved in rebar omissions and bid rigging—and further, a sector-wide audit of the construction industry—must identify the scale of LH's former high-ranking insiders embedded throughout and root out the entrenched structure of corruption."