A ruling from the Seoul High Court stated that 365 billion won of the 608 billion won penalty surcharge imposed by the Fair Trade Commission on Hoban Construction for 'work allocation' should be canceled. The penalty surcharge case by the Fair Trade Commission is proceeding through the second trial, following the Seoul High Court, and is being adjudicated by the Supreme Court.
The 7th Administrative Division of the Seoul High Court (Chief Judge Koo Hoi-geun, Judges Kim Kyung-ae and Choi Da-eun) ruled partially in favor of Hoban Construction on the 27th, in its lawsuit against the Fair Trade Commission for the cancellation of the penalty surcharge payment order and corrective order. The ruling cancels 365 billion won of the 608 billion won penalty surcharge. Some of the corrective orders were also canceled.
Earlier, the Fair Trade Commission imposed a penalty surcharge of 608 billion won and a corrective order on Hoban Construction in June 2023. This action was based on the investigation results indicating that Hoban Construction improperly supported and provided business opportunities to Hoban Construction Housing and Hoban Industries, owned by the second generation of the founder and other related parties.
According to the Fair Trade Commission, Hoban Construction engaged in what is known as 'swarm bidding' from 2013 to 2015. This involved creating multiple affiliates to increase the probability of winning public land bids. It was found that after receiving 23 public land projects, they transferred the projects to Hoban Construction Housing and Hoban Industries, companies owned by the founder's eldest son and second son. As a result, companies related to the founder's second generation were able to generate 58.575 trillion won in sales and 13.587 trillion won in profits from these public land development projects.