Suspicion of KOLAND`s Preference for H Co.`s Purchase of 40,000 Bundang Land

Korean Land Corp. (KOLAND) was found to have excluded 39,000 pyong of land in question from the list of its special sale of unsold land sites in Jungja region, Baekgung, Bundang-Gu, Kyunggi-Do from April to June in 1999, conducted before the change of their use, and had sold it to H. Co.

KOLAND carried out for a limited time a special sale of unsold land sites in Jungja region, Baekung on the installment plan with no interest from April 29 to June 30, 1999.

A total of 7 firms purchased 14,800 pyong of land in that region, among which six firms, including H. Industrial Co., H Construction Co., H Housing Co., C Construction Co., purchased 9,600 pyong, whereas Hyundai Engineering and Construction Co. purchased the remaining 5,200 pyong.

But the 39,000 pyong of land that H Co. purchased was excluded from the sales list, and was found to have been sold through a private contract on May 24, 1999, which was during the special sale period. Thus H Co. is suspected of having received a preference from KOLAND.

Regarding this suspicion, an official at KOLAND explained, ``The land in question needed not be sold at a special reduction like the no-interest installment plan because questions, including from Military Mutual Aid Association, about the land continued after POSCO terminated the purchasing contract.``

But the land in question was found to have been sold at 4,080,000 won per pyong, while the other lands were sold at 5,500,000 ~ 8,000,000 won per pyong during the special sales period.

KOLAND explained, ``The land in question was specially designed for a shopping complex, which contained more non-profitable aspects than other land sites for business-commercial use, and thus should be sold at a reduced price.``

In addition, suspicions have been arising that information leaked in advance as it was found that such small-sized construction companies as H. Construction Co. and H Industrial Co. purchased during the special sales period about 10 thousand pyong of land worth 50 billion won, when the change of its use was not determined yet.

A person concerned with construction industry said, ``All other companies were hesitating over the purchase of the land because changing its use was not easy at that time. Everyone raised a suspicion about such small-sized firms` purchasing of the land.``

The condition for the sale of the land at that time was to impose 10 percent installment interest unless the construction began before Dec. 30, 1999.

Since it has been known that only C Construction Co. had started to the construction on Dec. 30, 1999 to build business facilities while the other firms had paid the installment interest, it can be possible that the firms purchased the land, being fully assured in advance of the change of land use. C Construction Co. is now building 157 units of apartment complex through the alteration of design after the change of land use.

Nam Kyung-Hyun bibulus@donga.com