hankyoreh

Construction companies that paid large sums to the Mir Foundation and K-Sports Foundation gave amounts well short of the contracted level or no money at all to their own social contribution foundation around the same time, documents show.

But the companies also requested that the Ministry of Land, Infrastructure and Transport (MOLIT) grant extensions for payment of their shares in the process, citing “financial difficulties” - a stark contrast with their speed in completing contracted payments to the Mir and K-Sports Foundations.

Details on the funding of the Construction Company Social Contribution Foundation acquired by the Hankyoreh on Sep. 23 through opposition Minjoo Party lawmaker and National Assembly National Policy Committee member Je Youn-kyung showed the same companies that funded the Mir and K-Sports Foundations - Samsung C&T, GS E&C, Daelim Industrial, and Doosan Heavy Industries - paying just 1.6 billion won (US$1.4 million) to their own foundation, or 2.9% of the 55.0 billion won (US$49.8 million) in total contracted funding.

The social contribution foundation was established in Dec. 2015 with a fund of 200 billion won (US$181.2 million). A declaration ceremony of “commitment to self-purification and social contribution efforts” was spearheaded on Aug. 19 by the Construction Association of Korea (CAK) after 74 construction companies that had had their right to participate in public bidding restricted after evidence of bid-rigging saw their punishments reduced through special Liberation Day pardons that Aug. 15. Former Samsung C&T vice chairman Lee Sang-dae assumed the chairmanship, with other board member seats taken by directors at major construction companies like Hyundai E&C, Daewoo E&C, and POSCO E&C, the head of the MOLIT construction policy bureau, and the CAK vice president. Major efforts listed in the foundation’s plan for this year included providing housing support for vulnerable populations, building and expanding public facilities, and supporting repairs and maintenance for schools and welfare facilities.

But the company’s payment pledge went unkept, with no funding at all since the 11 highest-ranking companies in terms of assets raised an initial 4.7 billion won (US$4.3 million) in funds late last year. Samsung C&T, GS E&C, and Daelim Industries were assigned 15 billion won (US$13.6 million) in funding each, but the first provided only 1.0 billion won (US$906,000) and the latter two just 300 million won (US$272,000) each. Doosan Heavy Industries, which was assigned 10.0 billion won (US$9.1 million), has yet to pay a cent of its contracted amount.

The foundation has pressed for full payment several times in response to the companies’ failure to pony up - but the situation has remained unchanged. Even the MOLIT, the body that granted permission for the foundation’s establishment, leaned on them to submit payment submission execution plans. But on Sep. 8, six foundation executives and company representatives held an emergency round-table meeting, where they ultimately decided to request the full payment deadline be pushed back until 2017. A report from the meeting showed participants agreeing that “the full contracted amount must be paid by late 2016,” but concluding that “some adjustment of the time is necessary because of continued financial difficulties for the companies, including concerns about a sharp decrease in overseas orders and a declining housing market.”

The companies’ attitude was different when it came to raising funds for the nebulous Mir and K-Sports Foundations. Samsung C&T paid 1.5 billion won (US$1.4 million) to the Mir Foundation; GS E&C paid 780 million won (US$707,000) to both. Daelim Industrial produced 600 million won (US$544,000) for the Mir Foundation, while Doosan Heavy Industries gave 400 million won (US$362,000) to the K-Sports Foundation. Even under pressure from the CAK and MOLIT, the companies paid just 1.6 billion won - less than 3% of the contracted amount - to the public interest foundation they had set up in response to their pardons, yet they wasted no time in paying twice as much with their 3.2 billion won (US$2.9 million) to two foundations bearing little connection to their own interests. The Mir Foundation and K-Sports Foundation were also established around the same time as the social contribution foundation - the former in Oct. 2015, the latter in Jan. 2016. The circumstances hint that some forces beyond the level of a mere government agency were at work in the raising of funds for the Mir and K-Sports Foundations.

By Lee Se-young, staff reporter

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