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Economy

South Korea troubled by property scandal

Police in South Korea on Tuesday said they were serving search and seizure warrants. This was being conducted at the Korea Land and Housing Corporation headquarters in Jinju, south of Seoul. The Police were trying to gather evidence of illegal property speculation by employees.

A day after President Moon Jae-in called for an investigation, the police raids occurred. At least 13 employees at Korea Land and Housing allegedly had acted on insider information. They reportedly bought undeveloped land near Seoul before the government unveiled a new town development project in the area.

At South Korea’s state housing corporation, officials used insider information to cash in on runaway property prices. This accusation is strengthening an issue that already weakens support from the ruling party ahead of key elections.

About a fifth of South Koreans live in Seoul. Since May 2017, when Moon came into office, the area’s median apartment prices have soared nearly 60%. This was despite repeated government interventions to try to cool down the market.

Housing affordability has become a headache for Moon. Scandals have eroded his high levels of support, additionally, by high unemployment and slow economic growth.

The property speculation fuss comes a month before a by-election that will decide several key offices. This includes the mayors of Seoul and Busan, Korea’s two largest cities.

For the first time in a decade, Moon’s Democratic Party is likely to lose control of Seoul’s municipal government, polls showed.

His Party will struggle to retain Busan’s power following the incumbent mayor’s resignation amid a sexual harassment scandal.

Polls also showed the housing scandal is boosting the conservative opposition. It has been a mess since the impeachment of former President Park Geun-Hye in 2017. This is with a year to go until the next national presidential election

Korea Vows to Fix Housing Policy

South Korea’s Finance Minister Hong Nam Ki apologized to the public for the land speculation scandal. It involved the employees in the housing company operating by the state.

With his apology last weekend, the minister has promised to clean up before implementing stricter rules for a zero-tolerance policy. He said he would make sure he would seize the illegally acquired properties.

More than 10 former and current employees working at the Korea Land & Housing Corp. allegedly used information from the office. That was to acquire plots of land in two locations near Seoul. Minister Hong’s statement came after the state decided to investigate this.

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