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🇰🇷 South Korea /Economy & Trade

South Korea's two real-estate policy nominees face leveraged-investment allegations

From Dong-A Ilbo · () Korean

Translated from Korean and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources New plan
  • Allegations have emerged over property purchases by Lee Hyeong-il, nominee for deputy prime minister and finance minister, and Hong Ji-seon, nominee for land and transport minister.
  • Hong bought a Seoul apartment partly with a mortgage and a loan from her mother-in-law; an opposition lawmaker's office says its market value has since risen by about 400 million won.
  • Lee owned a Gwacheon apartment for 17 years but reportedly lived there for only four months, prompting criticism that it amounted to gap investment; hearings are scheduled for Sept. 15 and 16.

Two nominees expected to oversee South Korea's real-estate policy are facing scrutiny over their own housing transactions. Lee Hyeong-il, nominated as deputy prime minister and finance minister, faces questions about his limited occupancy of a home in Gwacheon. Hong Ji-seon, nominated as land and transport minister, faces allegations involving a heavily leveraged purchase in Seoul.

Hong bought an 84-square-meter apartment in Sindorim, Seoul's Guro district, for 1.005 billion won in May last year, jointly with her spouse, and currently lives there. She took out a 367 million-won mortgage and borrowed 170 million won from her mother-in-law. Together, the loan and borrowing covered 537 million won, or 53.4% of the purchase price.

The real-estate control tower stresses owner-occupancy while the Lee Jae-myung government tells people not to borrow money to buy homes. Their conduct runs counter to that policy.

· People Power PartyThe opposition party criticized the nominees over the alleged property investments.

Documents submitted for her confirmation review show that the family loan initially carried annual interest of 4.6%, with repayment of the principal deferred for one year. The terms were later changed to defer repayment for three years. The office of Kim Eun-hye, a People Power Party lawmaker, said the apartment is now worth about 1.41 billion won and claimed the couple had made a gain of more than 400 million won in roughly a year. A Land Ministry official said Hong would answer the questions fully if they arise at the hearing.

Lee bought a 54-square-meter apartment in Gwacheon in February 2009, but records show he lived there only from Nov. 1, 2012, to Jan. 2, 2013, and from Dec. 3, 2018, to Feb. 8, 2019. The opposition said both periods fell into gaps between tenants and described the arrangement as effectively gap investment linked to redevelopment. Lee said the apartment is currently being demolished as part of reconstruction. His ministry said he would explain personal matters in detail at the hearing. The hearings are set for Sept. 15 for Lee and Sept. 16 for Hong.

The Gwacheon apartment is currently undergoing reconstruction and is being demolished, so that is the current situation.

· Lee Hyeong-ilLee responded to questions about allegedly owning a home in which he did not live.
About this summary

Originally published by Dong-A Ilbo in Korean. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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