HDC's business license suspended for eight months
The suspension was due to a fatal collapse at a construction site in Gwangju that killed nine people in June 2021.
HDC Hyundai Development could face additional penalties, including being fully stripped of its license to operate, as it was also found responsible for an accident in January in which six construction workers were killed.
In reaching the decision, the Seoul Metropolitan Government found that changes in the original plan for the demolition of the building and failures in management and oversight contributed to the accident, in which a portion of the building fell on a passing bus.
During the eight-month suspension, HDC Hyundai Development will be barred from marketing and bidding on new projects, but it will be allowed to continue with existing projects.
This includes projects started, signed or won before Wednesday.
"The demolition collapse accident in Hak-dong, Gwangju, shows how our society still negligent and insensitive to safety," said Han Je-hyun, Seoul city government deputy mayor on safety management.
The deputy mayor said the Seoul government will hold those responsible for faulty construction accountable.
The Land Ministry requested the penalizing of construction company in January for the 2021 incident and last week requested an additional penalty for the January accident.
It has asked the city government to suspend the business license for a year or terminate it completely for the second accident.
If the Seoul government cancels the license, HDC Hyundai Development would be the first construction company to be shut down in nearly 30 years.
The Seoul government will make its decision within six months.
The last construction company to lose its license was Dong-A Construction, which was held responsible for the collapse in 1994 of Seongsu Bridge, in Seoul, that killed 32 people including students that were commuting.
Chung Mong-kyu resigned as chairman of HDC Hyundai Development in January after the second accident but remained chairman of HDC Holdings, which owns 41.5 percent of HDC Hyundai Development.
The construction company's management on Tuesday apologized during the annual shareholders meeting.
Co-CEO Kwon Soon-ho bowed to shareholders and said the company will take full responsibility and do its best in investigating the accident while promising major changes to regain customer and client trust.
Civic groups, including the People's Solidarity for Participatory Democracy, are demanding major changes to HDC Hyundai Development, including the appointment of an independent director specializing in industrial safety and the resignation or firing of executives responsible.
The civic group stressed in a statement that HDC Hyundai Development is a construction company that was found by the Labor Ministry in January to have committed 636 safety violations at 12 construction sites.
HDC Hyundai Development, which traded around 30,000 won ($24) a year ago, was trading between 15,000 and 16,000 won on Wednesday after falling as low as 13,000 won after the building collapse in January.
BY LEE HO-JEONG [email@example.com]