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New laws ban excess profits from gov't-linked land projects Updated: 2021-12-10 07:42:13 KST


South Korea's National Assembly passed two amendments on Thursday to put limits on private profits from land development projects with the government.
First is an amendment to the Urban Development Act which puts the limit in place, though the exact limit will be left to a Presidential Decree to provide flexibility.

"We will fully take into account the intent of the legislation as we pass the decree, and decide on specific number considering the businesses not exceeding 10-percent."

The other bill passed on Thursday was an amendment to the Housing Act that will allow the government to put caps on the prices of homes sold from public-private land development projects.
These amendments come in the wake of national outrage over a scandal still under investigation in which an asset management company, called Hwacheondaeyu, is accused of exploiting a land development opportunity to turn a profit of more than a thousand fold.
Also known as the Dae-jang-dong Scandal, the project was planned with the city government of Seongnam in Gyeonggi-do Province.
The company reportedly made some 55 million U.S. dollars on an investment of less than 50-thousand by allegedly colluding with some of the city's development officers and the nation's financial institutions.
The court is yet to rule on the criminal case, but the law would ban private profits of those proportions when companies work on land projects with the government.
Though caps are now in place, experts in the field say there's more still to do.

"As seen in the Daejang-dong Scandal, we shouldn't just stop with the confiscation of the profits from the development project. We also need to study what the fundamental issue really is, and then pass more laws to address the problem."
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"While this wraps up the regular session Lawmakers from the ruling Democratic Party and minor parties have called for a provisional session starting next week to discuss among other items the supplementary budget for COVID-19 relief for small business owners.
But for the supplementary budget to pass, it will need support from both sides of the aisle.
Kim Do-yeon, Arirang News."
Reporter : tkim@arirang.com
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