South Korea’s Finance Minister Hong Nam-ki on Sunday apologized for the snowballing land speculation scandal involving employees of the state-run housing company and vowed a zero-tolerance policy, including confiscation of any illegally obtained properties.

Hong’s statement follows the government’s decision Thursday to probe the allegations concerning more than 10 former and current employees at the Korea Land & Housing Corp. who likely used prior information acquired to purchase plots of land in two cities adjacent to Seoul designated for large-scale public development plans. The two cities are Gwangmyeong and Siheung, both in Gyeonggi Province, but the government has been investigating other similar areas that could have been subject to illegal transactions.

Since then, President Moon Jae-in has ordered an investigation into presidential staff members who could be involved in the matter, and a governmentwide probe into public officials’ land transactions has been launched.

“It is tragic to see such scandalous events unfurl in a public institution where it should be most ‘fair’ and (its officials) should be strict with themselves as handlers of real estate policies on-site,” the minister said in a meeting of real estate policy-related ministers.

“We plan to pursue zero-tolerance policies including a request for investigation and punishments, a review of adoption of real estate registration systems and moves to strengthen management and responsibility of the institution,” he added.

Any land and properties deemed illegally obtained will be confiscated as well, Hong said.

On the latest real estate measures announced Feb. 4 – focused on supplying 836,000 homes in Seoul and other major areas – Hong said the plan will be carried out without further delay. The prospective areas tied to the measures are slated to be announced by end-March, he explained. The Feb. 4 measures are focused on easing building and redevelopment regulations in key areas to offer affordable housings.

The latest scandal at the state-run housing developer has been working as a catalyst for growing public complaints over the Moon administration’s 25 sets of real estate measures, which have so far apparently failed to cool down the nation’s heated housing market.

According to a civic group survey released Wednesday, apartment prices in Seoul have continued to surge under the Moon administration, except in four months. The average price of 99.1-square-meter apartments in the capital city had jumped from 640 million won ($570,000) in May 2017 to 1.14 billion won in January this year.

The scandal has escalated despite the Moon administration’s efforts to keep its staff above suspicion. 

Last year, Moon replaced three key Cheong Wa Dae staff members -- all owners of multiple properties -- after the government announced plans to increase taxes for multiple-home owners and the perceived hypocrisy fueled public outrage. Since late 2019, Cheong Wa Dae has urged presidential aides and ranking officials to “set an example” by selling any homes where they do not reside.

By Jung Min-kyung (mkjung@heraldcorp.com)