Rep. Sohn Hye-won a Moon administration ally was accused of insider real estate speculation earlier this year
The Blue House ordered its high-ranking staff to sell any real estate they weren’t living in.
The announcement, released Monday by Blue House Chief of Staff Noh Young-min, is part of the government’s campaign to cool down real estate prices.
“Chief of Staff Noh has stressed the need of Blue House high-ranking officials to lead by example,” said Yoon Do-han, Blue House senior secretary for public communication.
The measure came as more former Blue House staff and top government officials have been accused of real estate profiteering, a cardinal sin for a liberal administration in Korea.
The civic group Citizens’ Coalition for Economic Justice on Monday claimed that the value of properties owned by officials from the current Blue House has risen an average 300 million won ($256,000) in the last three years.
The civic group claimed that the value of apartments and “officetels” (units in buildings used for both commercial and residential purposes) owned by 65 incumbent and former Blue House staffers as of January 2017 was valued at 820 million won on average, which rose roughly 40 percent to 1.14 billion won as of last month.
Moon's son-in-law bought a house in Seoul in 2010. #MoonJaein & his wife move in 2012-16. Moon moves in 2016 to another house. The son-in-law gives the house to his wife, Moon Da-hye, also Moon's daughter. 3 months later, Da-hye sells the house. Why such complex transactions? https://t.co/eBzbJBypsH
Another ruling party and Moon administration official caught up in a scandal:
A two-story building purchased by presidential spokesman Kim Eui-kyeom last July. The building, located inside the redevelopment zone of Heukseok-dong, Dongjak District, in southern Seoul, was worth 2.57 billion won (＄2.26 million). [YONHAP]
A real estate investment by presidential spokesman Kim Eui-kyeom has prompted accusations that he is guilty of real estate speculation – which the administration has done its best to crack down on.
On Thursday, the Government Ethics Committee’s Public Service Ethics Program released this year’s report on assets of senior public servants, including Blue House aides and cabinet ministers. According to the report, Kim purchased a building in Heukseok-dong, southern Seoul’s Dongjak District, for 2.57 billion won ($2.26 million won) last July, just weeks before the government announced strong antispeculation measures that applied to that neighborhood.
“Throughout the morning meeting, we discussed concerns over Kim’s purchase,” an official of the Blue House told the JoongAng Ilbo on Thursday. “We wonder if the public will accept the fact that he borrowed 1.6 billion won to make an investment in a redevelopment zone when the government was strongly pushing its policy to stabilize the real estate market.”
To purchase the building, Kim borrowed over 1.02 billion won from Kookmin Bank. He borrowed another 360 million won from individuals. In total, he took out over 1.6 billion won in loans to purchase the building.
The property is located inside the Heukseok 9 redevelopment district, one of the hottest redevelopment projects in Seoul. Lotte Engineering and Construction will redevelop the area to build 11 buildings that will house 1,536 apartments under the name Heukseok Signature Castle. A realtor in the neighborhood said the project is considered to be highly profitable to investors depending on when they got in. (…..)
“It is common sense among ordinary people that you shouldn’t take out a huge loan and invest unless you are certain that the building will soon be redeveloped,” said another Blue House official. “If accusations are made that Kim used information he obtained as the presidential spokesman and made the investment, the situation can be uncontrollable.”
Dr. Tara O has an article published over at the East Asia Research Council that digs into the Sohn Hye-won Real Estate Scandal. ROK Heads may remember that Sohn is the ruling party parliament member who used insider knowledge to benefit financially in real estate transactions in Mokpo.
Figure 1. Properties in Mokpo bought in the names of Sohn Hye-won’s relatives & associates; 20 properties are shown here, but the number is at least 25 as of 2019-1-19.
Sohn’s supporters ask what is wrong with her buying properties and making a profit? Buying properties and making profit is normal under free market capitalism. What is wrong, and illegal, is benefiting from privileged insider information, the abuse of authority, and using false names to purchase properties.
1. Sohn Hye-won is on the National Assembly’s Culture and Tourism Committee (국회 문화체육관광위) as the ruling party’s assistant administrator. As such, she had access to information about which areas would be designated as “cultural heritage” zones. She also has influence on which areas may receive the designation. Such a designation usually increases the value of properties in the zone. Using insider knowledge to gain in itself is illegal, but it also is an abuse of her position and authority. (…….)
Using another person’s name to buy property, open a bank account, or otherwise conduct transactions in another person’s name are illegal in South Korea. It is even worse when a lawmaker breaks the law.
Regarding the property that is in the name of Sohn Hye-won’s nephew (her younger brother’s son), the nephew did not even know there was a property under his name, according to the Kakaotalk chat between him and his mother. It stated “I invested in a property? A mere 23 year old conscript in the military? I don’t know anything about real estate. I supposedly invested in real estate? Me? It was given to me?” He was serving in the military at that time and only found out when the news broke.
I have always found it interesting how the Moon administration is busy throwing every conservative or even liberal rivals into jail, but for some reason are not going after Sohn.
Well Dr. O has found out that Sohn is close friends with Moon Jae-in’s wife Kim Jung-sook since they went to high school together. This close connection led the Moon administration to give the National Medal of the Order of Merit for National Foundation to Sohn’s deceased father in 2017.
Sohn’s father served in the Communist Youth League opposed to the Republic of Korea, but regardless was recognized by President Moon with the medal. This is more than a medal though, recipients and their family members receive a large financial stipend from the government:
This designation not only offers a recognition and national gratitude, but also allows Sohn Yong-woo’s wife to receive 1,518,000 won (~$1,400) per month plus other benefits from the government. It also provides 1,483,000 won ($1,325) per month and other benefits, such as priority in housing, education, and government jobs, to the family members other than the spouse, which includes Sohn Hye-won and her five siblings plus all of their respective children (Sohn Yong-woo’s children and grandchildren).
You can read much, much more at the link, but what else I found of interest is that Sohn owns a powerful marketing company. It makes me wonder how involved this marketing company was in creating the many false narratives used to take down former President Park Geun-hye and promote President Moon?
Here is a long, but interesting article about what is going on in the Seoul real estate market in regards to the jeonse rent system that continues to see higher prices which is causing renters to instead become buyers. This is in turn is making the jeonse rent go even higher and causing apartment shortages:
Up until last fall, 39-year-old office worker Kim Ji-seok was renting his apartment in Nowon District, northern Seoul under a jeonse agreement, a long-term deposit contract that is usually guaranteed for two years.
At the end of the summer, however, he bought a 59 square-meter apartment nearby for 320 million won ($267,468).
He decided to buy a house after his 220 million won jeonse rose nearly 30 percent to 280 million won in just two years. “I had to borrow 50 million won from the bank just to renew my jeonse contract,” Kim said. “I just decided to buy an apartment of my own as it seemed the jeonse price would again go up after two years.”
The housing market last year saw all-time record transactions as people like Kim, who were living on jeonse agreements, decided to finally buy an apartment. [Joong Ang Ilbo]
