Chung resigns from HDC Hyundai Development, keeps holdings post

HDC Holdings Chairman Chung Mong-gyu bows in apology during the press conference held on Monday, after a fatal accident left six workers dead or missing at an HDC construction site in Gwangju. [NEWS1]

Chung Mong-gyu resigned from his position as co-CEO of HDC Hyundai Development on Monday, six days after a fatal accident in Gwangju.

On Jan. 11, a facade of the 39-story apartment building under construction in Hwajeong-dong, Gwangju, partially collapsed, leaving five workers missing and one dead. HDC Hyundai Development was building the structure.

It is the ninth-largest construction business in the country.

The latest tragedy comes just seven months after nine people lost their lives during a building demolition in Gwangju being undertaken by HDC Hyundai Development. Three employees of the company are on trial for the incident for negligence of duty.

"I apologize to the family members of the victims in the accident in Gwangju and to the public," Chung said, bowing his head at a press conference held at HDC Hyundai Development headquarters in central Seoul.

Following the incident, the Gwangju Metropolitan Government issued a suspension order for all HDC construction projects in Gwangju on Wednesday. An investigation is underway to determine the cause of the accident.

"If any issue is found during the investigation, HDC will not only terminate the contracts with buyers but also consider complete demolishment and reconstruction of the buildings," said Chung.

Chung will maintain the chairmanship of HDC Holdings, which owns 40 percent of HDC Hyundai Development, to fulfill his duty as the major shareholder.

"Our business and apartment brand IPark have been built on the public trust since 1976 when we built our first apartment building in Apgujeong," Chung said, "I deeply regret that HDC has brought disappointment to the public with two accidents occurred in Gwanju."

Chung owns 36.5 percent of HDC Holdings.

He promised to compensate the families of victims for loss while strengthening safety measures by extending the warranty period to 30 years from the current 10 years.

"We will do everything we can to recover the credibility," said Chung.

Pressure is mounting on the company as the back-to-back accidents have severely damaged the brand image, with some people calling on HDC Hyundai Development to be dropped from projects.

In Anyang, Gyeonggi, residents of an apartment complex slated for redevelopment displayed banners saying "we can never leave our property and lives in HDC's hands."

The family members of the victims also criticized the company and Chung for lacking sincerity in his apology.

"Chung should have made the apology at the place where the accident occurred, like he did after the Hak-dong incident," said man claiming to represent families of the victims referring to the earlier accident.

The family members called for Chung to step up and take responsibility for the accident, but the case will not be subject to a reinforced safety law on construction sites, which is set to take effect on Jan. 27.

Chung took office as the chief of HDC Hyundai Development Company in 1999 and sought to diversify the business portfolio by investing in the mobility sector in 2019, but failed to do so due to the pandemic.

BY KO SUK-HYUN, KIM WON, HAN EUN-HWA [shin.hanee@joongang.co.kr]