Daebang Construction, ranked 22nd in construction capability assessment, has lent more than 1 trillion won in operating funds to about 10 affiliates just this year. The largest amount went to Daebang Industrial Development, owned by Chair Gu Kyo-un's daughter and daughter-in-law. Daebang Construction said the funds are "being managed at a level that does not strain the financial structure."
According to the construction industry and the Financial Supervisory Service's electronic disclosure system on the 11th, Daebang Construction on the 8th provided 28.6 billion won in operating funds through lending to Daebang Industrial Development Dongtan. It was the sixth time this year that Daebang Construction has supplied liquidity to Daebang Industrial Development Dongtan, and the total balance swelled from 15.1 billion won to 108.5 billion won in less than a year. The total balance refers to the lending after deducting repayments from the lending amount on the transaction date starting from the relevant fiscal year. Daebang Industrial Development holds about 95% equity and Daebang Construction 5% in Daebang Industrial Development Dongtan, which was established in 2017 to develop "Dongtan Station The ATR" in Hwaseong, Gyeonggi.
It is not only Daebang Industrial Development Dongtan. From January to this day, Daebang Construction has lent about 1.0246 trillion won to 12 affiliates across 46 transactions. That is more than double last year's level in the 400 billion won range. The purpose of the transactions was operating funds, and the interest rate applied was the current-law overdraft interest rate (statutory interest rate) of 4.6% per annum.
Among affiliates, the company that most frequently and heavily borrowed operating funds from Daebang Construction was Daebang Industrial Development. This company is a family business in which Chair Gu's daughter, Gu Su-jin, and the chair's daughter-in-law own 50.01% and 49.99% equity, respectively. Daebang Industrial Development secured hundreds of billions of won in liquidity virtually every month, a total of 12 times since February. The funds lent this year alone amount to 291.4 billion won.
Next, Daebang ENC was found to have borrowed a total of 117.6 billion won through lending across seven times this year. It was followed by ▲ Daebang Construction Dongtan (six times · 105.5 billion won) ▲ Daebang ENC (five times · 94.9 billion won) ▲ DB General Development, DB Civil Engineering & Construction, DB Housing (three times each · 81.2 billion won) ▲ DB Development Enterprise, DB ENC (two times each · 64 billion won) ▲ DB General Construction (one time · 26 billion won) ▲ DB Housing (one time · 21.4 billion won) ▲ Daebang Housing (one time · 19 billion won).
In the construction industry, there is concern that even if the purpose is to support affiliates in crisis amid a downturn, excessive support could worsen the group's overall financial structure. Among the subsidiaries of Daebang Construction and Daebang Industrial Development, many, such as Daebang Innovation and Daebang Industrial Development Dongtan, are in a capital impairment state. Daebang Construction, which is providing funds to affiliates, posted a net loss of 8.7 billion won in 2023, then returned to profit last year with net income of 32.5 billion won.
On top of that, Daebang Construction is currently under suspicion by the Fair Trade Commission of unfairly supporting Daebang Industrial Development. In February, the Fair Trade Commission imposed a 20.5 billion won penalty surcharge on the grounds that Daebang Construction resold six public housing sites worth 206.9 billion won to Daebang Industrial Development and its subsidiaries from 2014 to 2020. Accordingly, prosecutors in May indicted Chair Gu without detention on charges of violating the Fair Trade Act. The funds Daebang Construction has provided to Daebang Industrial Development this year already far exceed Daebang Industrial Development's consolidated total equity of 190.9 billion won last year.
Daebang Construction said this is an internal financial transaction commonly used in corporate management. A Daebang Construction official said, "Internal funding support is carried out selectively after fully reviewing Daebang Construction's liquidity capacity and financial soundness," adding, "Given market interest rates and funding conditions, intra-group funding is more efficient and competitive, allowing us to secure speed and flexibility in project execution."