Gyeonggi Province: "Mere Agricultural Corporations on Paper. In Reality, 'Real Estate Speculation Companies'"

[Suwon Ilbo=Park No-hun Reporter] Gyeonggi Province announced on the 26th that it will prosecute 25 agricultural corporations that illegally obtained farmland acquisition qualification certificates and engaged in real estate transactions, reaping substantial profits.

The land including farmland and forest land acquired and sold by these agricultural corporations throughout the province amounts to 600,389㎡—the size of approximately 60 soccer fields—and the unjust gains obtained through short-term transactions are tallied at 139.7 billion won.

Of this, farmland accounts for 422,986㎡, representing 79% of the total area sold. The 26 corporations falsely reported that they intended to farm despite having no genuine farming intent, sold the farmland they acquired, and obtained 110.6 billion won in unjust gains.

Kim Jong-gu, Deputy Director of the 'Gyeonggi Province Anti-Corruption Investigation Team,' held a press conference in the Gyeonggi Province Government building briefing room that afternoon, stating, "In the course of audits regarding public officials' real estate speculation in development areas throughout the province following the LH speculation allegations, it was confirmed that illegal activities by agricultural corporations are occurring frequently." He added, "Through real estate rights analysis and on-site inspections, we identified 26 agricultural corporations with violations of the Agricultural Land Act and decided to refer 25 of them to police for prosecution, excluding 1 corporation where the statute of limitations has expired."

Deputy Director Kim further stated, "In the audit of the Third New Town area targeting public officials and their families from the provincial government and Gyeonggi Housing and Urban Development Corporation, while some employees were confirmed to own or have transacted real estate, no speculation was discovered—such properties were acquired through inheritance or gifts, and showed no connection to their official duties."

According to the province, under the Agricultural Land Act, farmers and agricultural corporations can only own more than 1,000㎡ of farmland when purchasing for farming purposes.

In addition, non-farmers, general individuals can only acquire less than 1,000㎡ of farmland for weekend experience farming purposes.

In this process, farmland purchasers must receive a farmland acquisition qualification certificate from their respective township, town, or administrative offices without exception, and must actually engage in farming.

However, when the province examined 67 agricultural corporations that acquired farmland from 2013 onwards in 6 development projects by Gyeonggi Housing and Urban Development Corporation (Gwangmyeong Hakwon, Seongnam Geumto, Yongin Platform City, Anyang Indeokwon, Anyang Gwanyang Go, and Pyeongtak Hyunduk districts) and 7 Third New Town development districts (Namyangju Wangsuk, Hanam Gyosan, Goyang Changneung, Ansan Jangsang, Gwangmyeong Siheung, Gwacheon Gwacheon, and Bucheon Daejang) and surrounding areas, it found that 26 corporations acquired farmland and, without engaging in farming activities, subdivided parcels in a short time and resold them to numerous individuals, pocketing substantial capital gains.

Corporation A purchased 285,000㎡ of farmland and forest land in ○○ and ○○ districts from 2014 to 2020, receiving farmland acquisition qualification certificates for 167,000㎡.

However, from the day it acquired land ownership until January 28, 2021, it subdivided and sold to 1,267 people in parcels ranging from 17㎡ to 3,990㎡, earning 50.3 billion won over three years.

Notably, Corporation A continued to subdivide and sell farmland 77 times after being prosecuted in August 2016 by ○○ city for fraudulently obtaining farmland acquisition qualification certificates.

Corporation B's speculation activities were conducted widely across 9 cities and counties within Gyeonggi Province.

From 2014 to 2020, Corporation B acquired 44 parcels totaling 430,221㎡ of farmland, forest land, and other properties in ○○ district and surrounding areas, and sold subdivisions of 0.5㎡ to 1,650㎡ to 437 people starting from the date of ownership transfer registration. Although it was referred for prosecution on July 12, 2018, it continued farmland transactions until 2020. During this process, Corporation B obtained 6.793 billion won in unjust gains.

Additionally, Corporation C purchased 3 parcels of farmland in ○○ district totaling 1,088㎡ for farming purposes at 360 million won and resold them to 8 people at 880 million won, pocketing 520 million won.

However, when the farmland purchased by these 8 people from Corporation C was acquired for 790 million won by the ○○ district development project through January 2021, the 8 people suffered losses of 90 million won compared to their purchase price.

Additionally, Corporation D subdivided 1,589㎡ of farmland in ○○ township, ○○ city, and sold 331㎡ and 1,258㎡ respectively to an individual and Corporation E. The corporation sold it to the individual at 780,000 won per ㎡ while selling it to Corporation E at 190,000 won per ㎡, effectively charging the individual more than 4 times the price.

Concurrently, the province's anti-corruption investigation team conducted on-site inspections of farmland owned or sold by the 67 agricultural corporations under audit.

It confirmed that 35 parcels totaling 39,358㎡ had been abandoned in overgrown or barren conditions for extended periods without cultivation.

Additionally, 11 parcels totaling 14,461㎡ were illegally converted for use as parking lots, warehouses, livestock distribution facilities, and gardens.

Deputy Director Kim Jong-gu stated, "The 26 agricultural corporations fraudulently obtained farmland acquisition qualification certificates, purchased 89 parcels totaling 64,601㎡ of farmland across 13 development project districts alone, and resold them to 634 people, obtaining 24.3 billion won in unjust gains." He explained, "To confirm the illegal activities of these corporations, we expanded the audit scope across the entire province, and the land purchased by these 26 corporations for subdivision and resale comprises 431 parcels totaling 600,389㎡—approximately 60 soccer fields—with unjust gains totaling 139.7 billion won."

He continued, "We will refer 25 of these corporations to police for violations of the Agricultural Land Act, and will notify the local government jurisdiction of 1 corporation where the statute of limitations has expired for administrative measures. We will also notify cities and counties for administrative action against 16 corporations that either allowed long-term fallow without legitimate cause or illegally converted farmland into parking lots, warehouses, and distribution facility sites."

Separate from police prosecution, the province's anti-corruption investigation team plans to notify relevant departments of the audit findings and, given that the principle of 'those who cultivate shall own the land (耕者有田)' enshrined in the Constitution has been undermined and farmland is being exploited as a means for real estate speculation due to loopholes in the Agricultural Land Act and related systems, will prepare fundamental institutional improvements and formally recommend them to the government.

Deputy Director Kim Jong-gu pointed out, "Under the 'Act on Fostering and Supporting Agricultural and Fisheries Management Entities,' the national government and local governments nurture and support agricultural corporations for rural stability and national development. Agricultural corporations exploiting the law by treating farmland as speculation targets represent a serious abuse." He stated, "Since speculative farmland transactions through agricultural corporations are prevalent, and many people purchasing farmland from these corporations cannot actually farm, resulting in abandonment or illegal conversion to other uses, urgent institutional reforms are needed—including restricting real estate transactions by agricultural corporations, establishing mandatory farmland holding periods, and strengthening penalties for violations to prevent real estate speculation."

Meanwhile, separate from agricultural corporations, the province's anti-corruption investigation team conducted audits on real estate speculation by public officials in Third New Town development district areas, selected 22 suspected speculators for in-depth audits, but confirmed that 4 involved inheritance, 3 involved gifts, and the remaining 15 showed no connection to official duties.

Specifically, of the 22 people, a total of 10 owned or transacted real estate within the project districts. The in-depth audit results confirmed 3 obtained property through inheritance and 7 acquired property before marriage through their brothers-in-law or before 2000, showing no connection to official duties.

Additionally, 12 people owned or transacted real estate in areas adjacent to the project districts, of which 1 involved inheritance, 2 involved gifts, and the remaining 9 were excluded as they showed no connection to official duties.

By district: 9 from Namyangju Wangsuk, 4 from Hanam Gyosan, 3 from Goyang Changneung, 2 each from Ansan Jangsang and Gwangmyeong Siheung, and 1 each from Gwacheon Gwacheon and Bucheon Daejang.

To enhance the credibility and transparency of audits, the province's anti-corruption investigation team involved citizen auditors from the early stages of the audit, with 37 citizen auditors actively participating in audits of real estate speculation by public officials and agricultural corporations and major decision-making.

On the 22nd morning at the Gyeonggi Province Government building, with 10 citizen auditors in attendance, the team reported 'Second Self-Audit Results on Real Estate Speculation,' collected opinions from citizen auditors, and finalized the audit results.

The province's anti-corruption investigation team is currently auditing public officials' real estate speculation regarding fraudulent farmland acquisition for speculation purposes and business districts related to a former Gyeonggi Province official currently imprisoned.