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Seohee Construction Acquires Building from Subsidiary Owned by Owner's Daughters

[비즈한국] It has been confirmed through Bizhankook’s reporting that Seohee Construction035890 recently purchased a building from a subsidiary in which the owner’s family holds shares. The building is located at a planned redevelopment site near the Presidential Office in Yongsan, Seoul, and has become a liability after being designated as land for religious facilities in a recent maintenance plan established by Yongsan-gu. Bizhankook reached out to Seohee Construction for the background behind acquiring the affiliate’s building located within a redevelopment zone, but received no response.

According to the industry, Seohee Construction purchased a building in Hangang-ro 1-ga, Yongsan-gu, Seoul, from Hanil Asset Management & Investment for 14.6 billion KRW on the 23rd of last month. This building is a three-story neighborhood living facility (total floor area of 699㎡) located on the southwest side of the Samgak Mansion site special planning zone, which is slated for redevelopment near the Presidential Office. Five years ago, in November 2020, Hanil Asset Management & Investment purchased four buildings in the area for a total of 24.9 billion KRW. The property traded this time was the largest among them, and the purchase price at the time was approximately 3.7 billion KRW lower than this recent sale price.

Hanil Asset Management & Investment is a subsidiary in which Seohee Construction holds shares alongside Chairman Lee Bong-kwan’s daughters. Since its establishment in October 2005, it has been engaged in business related to real estate facility management and manpower services. Although the company’s revenue was only around 4.4 billion KRW last year, its asset scale reaches 199.3 billion KRW. The company’s shares are held by Seohee Construction (50.41%), the first daughter Lee Eun-hee (General Manager of Integrated Purchasing at Seohee Construction, 20.66%), the second daughter Lee Sung-hee (General Manager of Finance at Seohee Construction, 17.36%), and the third daughter Lee Do-hee (General Manager of Future Business at Seohee Construction, 11.57%).

A blueprint for redevelopment is currently being drawn up for the area surrounding the building. In September, Yongsan-gu requested that the Seoul Metropolitan Government designate the Samgak Mansion area as a zone for urban maintenance-type redevelopment and decide on a maintenance plan. The Seoul Metropolitan Government is scheduled to hold a city planning committee meeting in November to deliberate the proposal. Since being designated as a special planning zone in 2010, redevelopment was pushed by residents in 2017, but it was aborted due to opposition from the Korea Electric Power Corporation (KEPCO), which owns 25% of the total site. Consequently, Yongsan-gu established a maintenance plan to develop the KEPCO land (District 2) and the remainder (District 1) separately.

However, with the establishment of the Yongsan-gu maintenance plan, the buildings became a headache for Hanil Asset Management & Investment. The entire site of the four buildings previously owned by Hanil Asset Management & Investment—including the three currently held by the firm and the one sold to Seohee Construction—has been planned as land for religious facilities in the Yongsan-gu maintenance plan for the Samgak Mansion area. If the Yongsan-gu maintenance plan is finalized by the Seoul Metropolitan Government, Hanil Asset Management & Investment would have to surrender its older building located at the corner of the street on the southwest side of the zone and receive a new unit within the redevelopment zone instead.

Hanil Asset Management & Investment has expressed opposition to the current Yongsan-gu maintenance plan. During the process of gathering opinions on the plan, the company stated, “It would be reasonable for our site to be excluded from the maintenance zone, or if included, to be demarcated as a separate plot distinct from Districts 1 and 2,” adding, “There is no reason for our site to be included in this maintenance zone, and designating our site as public space is unjust in terms of the efficiency of public facilities and the convenience of land owners in the Samgak Mansion district.”

The reason Seohee Construction purchased the affiliate's real estate located in the redevelopment site remains unknown. Bizhankook asked Seohee Construction about the background of the building purchase and its utilization plans, but received no response.

Seohee Construction is currently under investigation by the Korea Fair Trade Commission (KFTC) on charges of providing unfair support to affiliates owned by Chairman Lee Bong-kwan’s daughters. According to the industry, the KFTC sent investigators to Seohee Construction and its affiliate Apple E&C for four days starting on the 14th to secure relevant data. Seohee Construction is accused of unfairly supporting the owner family’s companies through internal transactions. Apple E&C is a construction material wholesaler established in February 2017, and it is known that the eldest daughter, Lee Eun-hee, is the largest shareholder.

Meanwhile, Chairman Lee Bong-kwan of Seohee Construction is currently under investigation by a special prosecutor team on allegations that he gave expensive gifts such as jewelry to First Lady Kim Keon-hee to request a political appointment for his eldest son-in-law, Park Sung-keun, the former Chief of Staff to the Prime Minister.