▲ Sangdo District 11 apartment construction site, 2022. 2
"After the developer goes bankrupt, 'transfer of corporations', a profit of 400 billion won is expected from the free acquisition of business rights
Construction of an apartment building is in full swing on the site of Jidoksa Temple in Sangdo-dong, Dongjak-gu, Seoul, where the shrine of Daegun Yangnyeong, the eldest son of King Taejong of the Joseon Dynasty, is located.
Sangdo Prugio Clavenue, which is being built by Daewoo E&C on 47,000 square meters of land, has 771 units in 10 apartments with 5 stories below ground and 18 above, and the total sale price is estimated to reach KRW 1 trillion.
Daewoo E&C abruptly stopped the sale of apartments in Sangdo 11, which was scheduled for May last year.
On May 7, 2021, in the 'confirmation of invalidity of the sale contract' lawsuit filed by the Supreme Court against the developer Post Development and Woori Asset Trust (formerly Kukje Asset Trust) by WIZPMC, who participated in the land bid on May 7, 2021, "There was an unfairness in the land sale contract process. It is because the court overturned the judgment of the high court and ruled in favor of the plaintiff.
The Supreme Court ruled that Woori Asset Trust had to reconsider the plaintiff's claim that there was a problem in the process when Woori Asset Trust transferred the land in Sangdo 11 district from bankrupt Seah Housing to post development on December 13, 2014.
This is according to new evidence that "the actual owner of Post Development is the same as Ki Ki-seok, the CEO of the bankrupt Se-ah Housing, and Kim Mo, the registered director of Se-ah Housing and Chairman of Post Development," was revealed during the court proceedings.
In December 2013, the plaintiff, WisePMC, who was one of the eight companies that participated in the land sale bid in Sangdo District 11, said that Post Development and Seah Housing were owned by the same person. claimed that the land was taken back.
After lending 160 billion won, creditors such as KDB Capital, Woori Financial Group, and KB Securities and Woori Asset Trust, a trust company, deliberately bid for land in the 11th district of Sangdo, and handed over to a company owned by an unqualified person. The land was transferred by contract.
In fact, during the court proceedings, it was revealed that the owner of Se-Ah Home, which went bankrupt while pursuing a business, and the owner of Post Development, who bought the land, were the same person.
In the process of civil and criminal litigation between CEO Ki Ki-seok of Seah Housing, who is promoting the housing construction project in Sangdo 11 district, and Kim, a creditor who lent money to CEO Ki, the 'Sangdo 11 district joint venture' concluded by a court decision business agreement'.
On November 13, 2013, a month before the announcement of the confiscated land auction for Sangdo District 11, the two people signed a joint project agreement with CEO Ki Ki-seok of Seah Housing, who was carrying out the housing construction project in Sangdo District 11, and Kim Mo, a creditor and co-operator. Mr. (Registered Director of SeAH Housing) said, "We will establish a special purpose company (SPC) to resolve disputes in the past and successfully carry out the Sangdo 11 business. It shall be 49.5% of B or the person designated by B, and 1% of the person designated by A and B. Regardless of the stake, the shares of A and B, which receive dividends, shall be 50:50."
On October 19, 2018, the Seoul High Court held this agreement as evidence in a lawsuit such as confirmation of shareholder rights filed by Chairman Mo Kim against CEO Ki, etc. All of the 29,700 shares (49.5% stake) owned by Myung-sung belonged to the real shareholder, CEO Lee Ki-seok, and the plaintiff lost the judgment.
On March 11, 2019, the Supreme Court made a decision to dismiss the trial, and confirmed the lower court.
The Supreme Court, which was the final trial, also found that 'the bankrupt Seah Housing CEO Ki Ki-seok and co-operator and registered director Kim are the real owners of Post Development, who has taken over the housing construction business rights and land in Sangdo 11th district again and is conducting the business'. it has been confirmed
In July 2007, 'Seah Housing', which went bankrupt due to the financial crisis in 2008 after purchasing the site of Jiduksa Temple, went into bankruptcy due to the financial crisis in 2008, changed its name only to 'Post Development' and re-established its business. This is a part that gives strength to the claim that KDB Capital, Woori Financial Group, and KB Securities and other 15 creditors' representative financial institutions systematically defended them.
On October 25, 2021, the Seoul Central District Court also confirmed the fact that the owners of Seah Housing and Post Development are the same, and the Korea Deposit Insurance Corporation (KDIC) took notice of the borrowed-name shares of the joint guarantee debtor Ki Ki-seok and the post-development shares held by Chairman Kim. The application for provisional seizure was accepted.
Solomon Savings Bank, Gyeonggi Savings Bank, and Jinheung Savings Bank, which went bankrupt after lending money to Seah Housing, raised their hands so that the Korea Deposit Insurance Corporation, which started collecting bonds on behalf of the bank, raised its hand to collect the profits from the apartment development project in Sangdo 11th district worth 1 trillion won. will give
In this regard, only Chairman Mo Kim appealed to the court, and CEO Ki-seok Ki is acknowledging the fact that he established Post Development to forcibly avoid unpaid debts to Seah Housing creditors, that is, to avoid debt.
In the complaint, the Korea Deposit Insurance Corporation said, "The amount of money that the creditors who lent money to Se-Ah House did not repay amounted to 350 billion won, which is more than double the 160 billion won of the loan. The construction forces that implemented the project in District 11 are on the verge of creating enormous wealth of 400 billion won through illegal and evasive acts. As such, it is the 'second Daejang-dong incident'."
However, on December 16 last year, seven months after the Supreme Court's remand and remand, the Seoul High Court ruled against the plaintiff again, saying, "There is no problem with the sale contract for the Sangdo 11 district."
The Seoul High Court stated in its ruling that 'It is difficult to treat Seah Housing and Post Development as the same corporation.'
This is in direct contradiction to the previous Supreme Court rulings.
A representative of WisePMC appealed to the Supreme Court again at the end of last year, saying, "There is a plethora of evidence and testimonies that the owners of Seah Housing and Post Development are the same."
"Profit of 400 billion won from 300 million won investment"... What's going on in Sangdo District 11?
The site of 'Jideoksa' at San 65 Sangdo-dong, Dongjak-gu, Seoul is the place where 'Ije', the eldest son of Taejong, the 3rd king of the Joseon Dynasty, is enshrined.
In the mountainous area, excluding the cemetery, there were about 300 homeless residents living there, but as housing development projects were carried out here in the 1990s, noise such as bribery between the foundation leaders, apartment builders, and public officials continued.
The housing development project, which started as part of the project to commemorate the 600th anniversary of the birth of Daegun Yangnyeong in 1992, was transferred to Jinil Leisure Industry through central industrial development.
In 1998, the CEO of Jinil Leisure Industry and Chairman Jongchin were arrested on charges of borrowing money from a financial institution to purchase land and exchanging bribes in the process of obtaining a business license. .
At this time, it was Seah House CEO Ki Ki-seok who entered the housing construction project at the site of Jiduksa Temple.
In July 2007, Seah Housing signed a land purchase contract with Jiduk, and switched the housing business from a cooperative to a private housing business.
It is an interpretation that the development method has been changed in a way that does not need to prepare measures for the relocation of displaced people.
In the process, CEO Ki, Chairman Ji Duk-sa, the redevelopment committee chairman, and Dongjak-gu Office staff were also arrested on charges of accepting 6.5 billion won in bribes.
On March 31, 2008, 'Seah Housing' received real estate investment financing (PF) worth 160 billion won from 15 financial institutions representing Kumho Securities (currently Woori Securities) and paid the land price to Jiduksa in full. and started business in earnest.
However, in the aftermath of the 2008 global financial crisis, Kumho Industrial, which was in charge of guaranteeing the principal and interest and completion of loans loaned by creditors, stopped its business when it applied for a workout at the end of 2009.
When SeAH Housing fell into financial trouble, CEO Ki Ki-seok brought in Mr. Kim, who is a senior and junior from his hometown, and received an investment of 2.99 billion won, and in March 2011, he registered Mr. Kim as a registered director of SeAH Housing.
In May 2013, at the request of Daewoo E&C and Mr. Kim, who started to play a leading role in the housing business in Sangdo 11th district, Mr. Ki took over a company called 'Dongsung NC' in May 2013, and Seah Housing, which went bankrupt in Sangdo 11th district business rights. While pursuing a plan to transfer to Dongsung NC, on November 13, 2013, a new special purpose company (SPC) post development was created and designed to relieve the debt of Seah Housing, and the housing development project in Sangdo 11 district was completed. It is a joint venture agreement to divide the shares 50/50.
On December 4, 2013, the day before the announcement of the auction for the land in Sangdo District 11, Mr. Ki and Mr. Kim established Post Development Co., Ltd. with a capital of 300 million won and participated in the bidding.
The land auction, which was held for three days, was bid five times and was converted to a private contract on December 13, and 8 companies including Post Development, WisePMC, JoongAng Industrial Development, and V&I Korea participated in the sale of the land.
On February 14, 2014, Post Development was selected as the preferred bidder for the sale of land in Sangdo District 11, and on March 13, a sale contract was signed for KRW 111.1 billion.
The land that was seized after being purchased by Seah Housing by lending it 160 billion won was returned by the owner to the same post development after receiving only 110.1 billion won.
Post Development, which signed a land purchase contract for KRW 111.1 billion on March 13, 2014, paid only KRW 2 billion, which is 2% of the land price, as the first down payment, and the second down payment promised on May 11, KRW 9 billion didn't pay
Accordingly, as of May 11, the sale contract was canceled, but the creditors did not confiscate the down payment of 2 billion won.
And on August 10, Post Development did not pay the balance of KRW 99 billion, but the creditors deferred the cancellation of the contract on September 25 and reduced the delayed interest from 11% to 6% per annum.
And on July 4, 2019, after 4 years and 9 months, he paid the balance, but he did not even receive 25.6 billion won in interest accrued after that.
However, in the process of carrying out the project that followed, the conflict over the interests of Mr. Ki and Mr. Kim continued, and it was revealed that unfair methods were mobilized in the land sale bid and private contract process.
Woori Asset Trust (name changed from Kukje Asset Trust), who was in charge of the sale, arbitrarily extended the sales contract that had to be canceled without the consent of the creditors, and induced the bids by conducting only five bids, which the creditors were supposed to carry out six times. In the process, it was revealed that he had informed Se-Ah Housing about the price of a competitor's participation in the bid.
Jidoksa Temple, where the executive branch was changed, also filed a lawsuit for 'transfer of ownership', claiming that the land was illegally sold.
In spite of various lawsuits and revelations, Dongjak-gu Office gave the final business license to Post Development, and Post Development received a 130 billion won loan (bridge loan) from Korea Investment & Securities on July 4, 2019, with the balance of 99 billion won and the remaining balance. It paid only 1.7 billion won in interest for 60 days as compensation for delay due to delay.
From October 2014, when it was originally supposed to pay the delay damages due to the delay of the balance, 4 years and 9 months' worth of interest until the payment of the balance in July 2019 was deferred again.
In addition to the 350 billion won in the principal and interest of the loan to be repaid by Se-Ah Home, which went bankrupt, it is also being pointed out that it is a breach of trust because it indemnifies 25.6 billion won in delay damages.
On October 17, 2019, Samsung Securities and others created 'Sangdo Development Investment Co., Ltd.' with a capital of only KRW 1,000 and provided project financing of KRW 480 billion. Apartment construction has begun.
Who made up the shareholders of Sangdo Development Investment Co., Ltd., with a capital of 1,000 won, and who participated in the project finance is veiled.
The details of the contract are not yet known who will distribute the 400 billion won in profits expected from the apartment construction.
Sangdo Development Investment Co., Ltd. and Samsung Securities, Daewoo E&C, and Post Development, which are offshore companies, have prepared only one business contract and keep it in Samsung Securities.
Samsung Securities and Daewoo E&C, which are listed companies, have been criticized for violating their disclosure obligations by not disclosing the contract details to investors in a transparent manner.
The auditor of KDB Capital was fired for pointing out the problem… Creditors who are in the process of collecting loans
On December 10, 2019, KDB Capital, a subsidiary of Korea Development Bank, held a general meeting of shareholders, dismissed audit committee member Jeon-gyu Park and appointed outside director Jeong-hak Kim as a new member of the audit committee.
Korea Development Bank (Chairman Lee Dong-geul) said, "In order to strengthen the independence of the audit committee of KDB Capital, which holds a 99% stake, the audit committee operation regulations were amended so that all three audit committee members of KDB Capital are outside directors, and auditor Jeon-gyu Park was dismissed. ." he said.
However, auditor Park Jeon-gyu said, "This was a retaliatory measure for pointing out the problem that KDB Capital, which provides the largest number of loans among 15 creditors for the Sangdo 11 housing construction project, and serves as a secretary of the creditors, is not properly collecting debts." protested
The term of Auditor Park, who took office in May 2018, was until May 2021, with half of his term remaining. But Park did not accept it.
Park, a former full-time auditor, said that unfair profits that would be attributed to post-development, along with civil and criminal actions, were taken against illegal acts by the executives and employees of financial institutions such as the president of the state-run bank, Korea Development Bank, the president of KDB Capital, the president of Woori Financial Group, and the president of KB Securities. Legal action is being taken so that it can be returned to the institution.
Park Jeon-gyu, a full-time auditor of KDB Capital, reported the audit results to the board of directors on June 25, after receiving a report regarding the collection of loans from Sangdo 11 and related management breaches in early 2019 and conducting the audit for three months.
However, "KDB Capital's management issued a disciplinary disciplinary action to hold off promotion for the KDB Capital prosecutor's office, who had undergone a special audit on those subject to promotion on June 28, and on July 31, the in-house general manager and general manager-level employees were subject to an audit on Park's audit. At the time, I was able to get a signature by returning the soft book sheet suggesting dismissal."
In addition, the Korea Development Bank claimed that Auditor Park interfered with the audit by inspecting the management status of its subsidiary, KDB Capital, from April 17 to 26, 2019, while conducting a special audit on management's breach of trust.
Former Audit Committee member Park also confirmed that Korea Development Bank and KDB Capital have confirmed that SeAH Housing and Post Development are virtually the same company, and that the shareholders are the same. He claimed that the trust company did not take any disciplinary action and gave an indulgence that the debt collection action was justified, even after confirming that the creditor's approval process was omitted.
Then, on October 17, Korea Development Bank, the largest shareholder of KDB Capital, sent an official letter requesting 'replacement of full-time auditors'.
On October 21st, KDB Capital requested an audit committee to be held while Auditor Park was on vacation. It was decided to hold a general meeting of shareholders with the dismissal of the members as the agenda.
KDB Capital held the 7th audit committee on the 'special audit report' on December 30 and said, "It was discovered that some of the operations of Kukje Asset Trust were not smooth during the short bidding process of the site of Jiduk. As a creditor, it was found that a more active follow-up management attitude was disappointing. (But) no loss, gross negligence, neglect, etc. were found in the company. It is acknowledged that the long-term non-performing loan was collected early
. I will not admit it.”
This means that the audit report paid electronically by the full-time auditor who conducted the audit in accordance with the Commercial Act and the articles of incorporation was discarded afterwards.
On November 29, one month before the 7th Audit Committee, which decided to abolish the audit report, KDB Capital gave a false answer to the Seoul Central District Court's request for submission, saying, "There is no special audit report."
Former auditor Park Jeon-gyu said, "After reporting the results of the special audit related to the collection of bonds in Sangdo 11 in June 2019, Korea Development Bank Chairman Lee Dong-geol himself and KDB Capital Chairman Lee, who was an outside director and audit committee member at the time, said, "Kim, Yale University's junior in the US. Mr. Mo tried to convince him, but he refused. After the resolution of dismissal was decided at the general meeting on December 10, he gave a desk in front of the library and effectively imprisoned him, deleted all related computer files, and put documents related to special audits in a safe and accessed the executives and employees. A restraining order was issued," he said.
Creditors, appraisal agencies, and supervisory agencies pretend they didn't see the report... Is there a black connection?
In June 2019, after writing a special audit report related to the report of KDB Capital management’s breach of trust, in June 2019, auditor Park Jeon-gyu reported the audit results to the Financial Supervisory Service and requested an audit of KDB Capital.
In August 2020, the Chief of Staff of the Blue House, the chief of civil affairs, the anti-corruption secretary, and the Board of Audit and Inspection also requested an audit and inspection of KDB Capital.
In September 2020, a public interest report was also reported to the Seoul Central District Prosecutors' Office.
However, the inspection of Chairman Lee Dong-geol of Korea Development Bank and the audit of KDB Capital have not been carried out yet.
Although profits of about 400 billion won are expected from the apartment construction in Sangdo 11th district, 15 financial institutions that initially loaned 160 billion won to this project are also showing no movement to collect their debts.
Only the Korea Deposit Insurance Corporation provided project finance for the Sangdo 11 housing construction project and then foreclosed the stocks of Post Development on behalf of Solomon, Gyeonggi Savings Bank, and Jinheung Savings Bank, which went bankrupt. There is no litigation.
Kumho Financial Group, which was the initial secretary of the creditors in Sangdo District 11, was incorporated into Woori Financial Group as Woori Financial Group, and Kumho E&C, which held joint guarantees and took responsibility for construction, was incorporated into Daewoo E&C.
The largest shareholder of Woori Financial Group is the Korea Deposit Insurance Corporation, and Daewoo E&C, which has recently been sold to Jungheung Construction, is managed by Korea Development Bank.
Auditor Park Jeon-gyu said, "In the process of investigating the alleged bid corruption and creditors' breach of trust in Sangdo District 11, I received strong consolation and pressure from Korea Development Bank President Lee Dong-geol, as well as politicians and incumbent ministers." It seems that securities and other companies are not hasty to collect bonds.”
However, Park Jeon-gyu, a former standing auditor of KDB Capital, argued that the Korea Development Bank and KDB Capital, which were established with the blood of the people, should promptly take measures to preserve their debts against the undue profits of builders.
Large domestic financial institutions, such as KDB Financial Group and Woori Financial Group, to which KDB Capital and Korea Development Bank belong, have become super-large institutions through the financial crisis, and have virtually no owner-free governance structure.
Former Audit Committee member Park Jeon-gyu is fighting alone, saying that the moral hazard of financial institutions that have become such huge dinosaurs for three years must be fixed.
Our sense of smell is sensitive, but we quickly get used to the smell.
No matter how good the scent, no matter how strong the stench, you quickly get used to it and you can no longer feel it.
But when we get used to the strong scent, we die.
As a public interest informant, I have been fighting a giant financial group alone for more than three years, but looking at Park Jeon-gyu, an audit committee member of KDB Capital, who has been thoroughly ignored, makes us reflect on whether we have become accustomed to the wrong scent.
Even now, I hope that the social conscience will spring up to save that 'Private Ryan'.
'Saving Private Ryan' is more urgent because it is also about saving all of us.