HDC's business license should be yanked: Land Ministry

Hyundai Development Company's headquarters in Yongsan, Seoul, Monday [YONHAP]

The Land Ministry on Monday requested the Seoul Metropolitan Government to either terminate Hyundai Development Company's (HDC) business license or suspend it for a year following the collapse of an apartment building under construction in Gwangju that killed six workers in January.

If the license is terminated, the construction company would only be able to reapply after five years.

The ministry also requested that the Gwangju Metropolitan Government suspend or cancel Gahyeon General Construction's business license.

If the Seoul government accepts the request, it will be the first case of a construction company losing its license since Dong-A Construction in 1994 after the Seongsu Bridge in Seoul collapsed.

The Land Ministry stressed that the penalty is the strongest against a construction company responsible for endangering the public through faulty construction.

Preliminary studies by the government investigation team found that variations on the original design, including the use of fewer support beams, and subpar cement led to the collapse of the building under construction.

The government in January requested that the Seoul government suspend HDC for eight months for another construction accident in Gwangju. In the collapse, of a building being dismantled in 2021, nine bus passengers were killed.

Even if the Seoul government settles on a one-year suspension, when adding the eight-month suspension, HDC won't be able to bid for construction projects for nearly two years.

Apartment construction accounts for 70 percent of HDC's business portfolio.

The Land Ministry also on Monday announced plans to toughen measures against faulty construction. It intends to take jurisdiction over accidents related to faulty construction from local governments.

These are accidents in which there are at least three deaths or 10 people injured or where a building must be rebuilt because of a collapse.

The Land Ministry said the move is being taken to shorten the time it takes to penalize construction companies or those involved. It noted that local governments have a tendency to announce the penalty after a criminal court ruling is made.

Once the central government gains jurisdiction, it says it will show no mercy toward companies responsible for accidents that result in the death of three passersby or five workers.

A company responsible for two accidents related to faulty construction within five years will have its license terminated.

In cases involving death, the company will have to pay treble damages.

Those whose businesses have been suspended due to faulty construction will be prohibited from participating in public housing projects and will be unable to receive guarantees from related agencies.

The ministry said it plans to develop the reforms over the next month and submit them to the National Assembly this year.

"We plan to strengthen construction safety so that no workers or other people lose their lives from a construction site and feel anxiety over such sites," said Kwon Hyuk-jin, urban policy director general at the Land Ministry.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]