Jugong Suspected of Favoritism In Real Estate Deal

Real estate experts argue that Good Morning City Chairman Yoon could dispose of some tens of billions of won in real estate holdings with only 10 percent of contract money (18 billion won) being paid due to support from Jugong.

It was found that Jugong has released notices to sell off Hanyang properties six times since last July. It signed an agreement of mutual understanding with Good Morning last June.

The notices were designed for only those buyers who could put down the money for a total of 18 commercial properties worth 172.85 billion won, making it nearly impossible to attract any normal buyers.

There has been some doubt over Jugong`s apparent regular notices, which were intended to hide its favoritism towards Good Morning on the purchases.

“It was impossible to acquire them since they were too expensive and included really bad deals. Jugong only released its notice that it would not sell its properties to anyone else but Good Morning,” said a real estate agent who tried to purchase the properties.

Another point of contention is that Jugong decided to turn its properties over to Good Morning only after receiving 132.5 billion won, much less than the original notice price.

In fact, there were some arguments over the abnormal sell-off process at the meeting of Jugong executives last November. “If the sell-off process was voted against, it would wreak havoc on society,” said a management representative.

Industry watchers assume that Chairman Yoon may have acquired properties at a low price to have some cash on hand and, in the process, there may have been some kind of political lobbying activities.

An official from Jugong defended its position. “The 400 billion won in marginal profits occurred because the Hanyang owner sold off two of his major real estate properties while Jugong only calculated the fixed collateral. What money Good Morning could earn from the sell-off will belong to Jugong and Hanyang. There is no profit left for Good Morning,” he said.

Chang-Won Kim changkim@donga.com