hankyoreh

Chung Mong-gyu, chair of the HDC Hyundai Development Company, addresses the Korean public from the company’s headquarters in Seoul on Monday, where he apologizes for the collapse of the outer wall of an apartment building in Gwangju. (pool photo)

The South Korean government said it’s considering levying the toughest penalty legally permitted against HDC Hyundai Development, the company behind two buildings that have collapsed in Gwangju.

Chung Mong-gyu has decided to step down from his position as chair of HDC Hyundai Development Company, though he will remain chair of HDC Holding Company. But critics say that Chung’s resignation is aimed at appeasing public anger over the company’s foot-dragging.

Minister of Land, Infrastructure and Transport Noh Hyeong-ouk discussed the toughness of government sanctions on HDC Hyundai Development in a Monday meeting with reporters at the Government Complex in Sejong.

“I think [the company] may have to face the toughest penalty that the law provides. We’ll have to decide on the appropriate punishment based on what the investigation finds, but [HDC] has caused serious accidents not once but repeatedly,” Noh said.

South Korea’s Framework Act on the Construction Industry stipulates that the possible penalties for construction companies that are guilty of shoddy construction work include cancelation of their business license and suspension of business operations for up to a year.

In particular, a business license can be canceled when a company endangers the public by seriously damaging major structural components of a facility through shoddy construction work, whether by intention or negligence.

Noh noted that the license cancelation clause had only been invoked once, after the 1994 collapse of the Seongsu Bridge, adding that applying it to HDC would require a legal review.

According to the Ministry of Land, Infrastructure and Transport, Dongah Construction Industrial Company’s license to do business in the construction industry was canceled following the bridge’s collapse. But the company filed a lawsuit asking for the cancelation to be revoked, arguing that the penalty was inappropriate.

“We will figure out whether the company complied with safety protocols during construction and whether there were any structural problems in connection with subcontracting or with construction supervision or management,” Noh said, explaining that the ministry’s committee for investigating construction accidents is collecting evidence and hearing testimony as part of its investigation’s initial phase.

Noh said the accident was “apparently caused by a combination of factors, including a rushed construction schedule, an indifference to safety, and sloppy construction work, as reported in the press.”

Chung Mong-gyu made a public apology and announced he would resign as chairman of HDC Hyundai Development Company in a press conference Monday at the company’s headquarters in Seoul’s Yongsan District.

“With humility, I offer a sincere apology to the families of the victims in the accident in Gwangju and to the public,” Chung said.

While Chung stepped down as CEO of HDC’s development business when the group was put under the control of a holding company in 2018, he stayed on as company chairman.

“I will continue to perform my duties as majority shareholder,” Chung added, suggesting that he will remain chair of the group’s holding company. The company explained that Chung resigned to show that he means to do everything he can as group chairman to deal with the accident and provide compensation for damage.

“If problems are found in a structural safety assessment, we will consider not only releasing apartment buyers from their contracts but also complete demolition and reconstruction,” Chung said.

The company clarified that Chung was referring not only to Block 201, where the outer wall of the building had crumbled, but the entire apartment complex.

As a method of restoring trust, Chung promised to greatly strengthen HDC Hyundai Development Company’s safety and quality guarantees by lengthening the structural safety guarantee for the building framework to 30 years — triple the 10-year guarantee period that’s currently mandated by law.

But an action committee set up by those affected by the accident at Hwajeong Ipark in Gwangju responded to Chung’s resignation by saying they’re “not interested in apologies.”

“Rather than stepping down so as to avoid responsibility, Chung needs to submit to an appropriate punishment and to take total responsibility for finding a real solution,” the committee said.

The action committee also called for HDC Hyundai Development, as the party responsible for the accident, to be removed from search and rescue efforts.

Some say the company’s proposed remedy of demolishing and rebuilding the apartment complex is not enough to restore trust because it’s contingent on the results of the safety assessment.

A group of provisional homeowners at the complex called for both Ipark complexes in the Hwajeong neighborhood to be "totally demolished and rebuilt, without making that contingent on the results of the safety assessment."

By Choi Jong-hoon, staff reporter

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