[비즈한국] Kyobo Asset Trust, a subsidiary of Kyobo Life Insurance, is facing growing controversy due to a series of onsite disputes, including allegations of illegal occupation during a townhouse development project. Critics point out that these various disturbances surrounding Kyobo Asset Trust are undermining the credibility of the "ethical management" philosophy championed by the Kyobo Life Insurance Group. Due to these controversies, Kyobo Life Insurance Chairman Shin Chang-jae was mentioned as a witness for the National Assembly's parliamentary audit, although his summons was eventually withdrawn. However, concerns regarding the poor management and oversight of the subsidiary remain.
"Illegal Leasing" vs. "Unauthorized Occupation": Kyobo Asset Trust in Conflict with Developer
The "Jukjeon Terrace & 139" project in Yongin, Gyeonggi Province, involving Kyobo Asset Trust and the developer Bojeong PJT, garnered significant attention when it sold out all units during presales in 2021. However, as the contractor, Donggang Construction, entered court receivership, completion was delayed by more than 9 months beyond the original plan, followed by a series of construction defects such as water leaks and missing railings. Ultimately, only half of the 139 households moved in, while the remaining 65 households filed a class-action lawsuit demanding the cancellation of their sales contracts and the refund of their payments.
The conflict between the developer and the trust company intensified following a "pre-move-in trial program." Since last June, while residing on-site to manage and maintain the complex, Bojeong PJT utilized some units for temporary residency to prevent deterioration due to long-term vacancy. A developer official explained, "We notified residents that a lawsuit was underway and included a special clause stating that they must vacate without conditions upon 3 months' notice. We also specified penalty clauses in case they refused to vacate."
However, Kyobo Asset Trust deemed this an act of illegal leasing and filed an eviction lawsuit against the developer and the tenants in January. Kyobo Asset Trust stated, "It is clearly an act of unauthorized occupation for the developer to arbitrarily lease units that have existing buyers to third parties."
Subsequently, under the pretext of securing a lien, they deployed about 50 private security personnel to the site in the early hours of August 31. Some remain on-site to this day. A Kyobo Asset Trust official explained, "The stationed personnel are in the process of verifying unauthorized occupied units that are not under formal sales contracts and will withdraw once the eviction is complete."
The developer is strongly resisting these measures. They deny Kyobo Asset Trust's claim of illegal leasing and argue that the deployment of security personnel by Kyobo is a forced eviction without legal basis. A Bojeong PJT official stated, "Nowhere in the trust agreement are there clauses regarding who holds leasing rights or the need for prior consent procedures," adding, "With over half the buyers refusing to move in due to the class-action lawsuit, Kyobo Asset Trust neglected the vacancies while denying their management duties. The pre-move-in program was an inevitable measure for defect repairs and minimal maintenance."
This official criticized, "We spoke to Kyobo Asset Trust several times about this necessity, but Kyobo maintained a bystander-like position, claiming that 'lender group consent is required.' Then, they suddenly changed their attitude, deployed security personnel, and are continuing illegal measures before the court has even made a judgment." They further protested, "Forced execution is only possible with a court's eviction order, and it is an illegal act for Kyobo to occupy the site while the lawsuit results are not yet final."
In response, Kyobo Asset Trust countered, "We have reported the unauthorized occupation to the court," adding, "A significant amount of capital has been invested in this site. The illegal occupation must be resolved so that buyers can move in, and the company can settle the funds by collecting the balances."
Bojeong PJT believes the on-site occupation by Kyobo Asset Trust is related to a strategy to gain an advantage in the lawsuit. A Bojeong PJT official said, "There is currently a lawsuit pending for the cancellation of 56 sales contracts, and some buyers have added the fact that 'why was the house I purchased leased out?' as grounds for their claim," adding, "It seems Kyobo Asset Trust took these extreme measures because they judged that clearing the leases would increase their chances of winning."
Chairman Shin Chang-jae Faces Responsibility
As it became known that Kyobo Asset Trust deployed security personnel to occupy the site without a court order, the controversy over illegal forced execution is escalating. This is appearing to spill over to the parent company, Kyobo Life Insurance. As Kyobo Life Insurance has emphasized "customer-centered responsible management" and "ethical management," there are concerns that controversies involving a subsidiary could affect the credibility of the entire group. In particular, since Kyobo Asset Trust is a 100% subsidiary of Kyobo Life Insurance, critics point out that the parent company's failure in management and supervision is the root cause of the problem.
In the recent parliamentary audit at the National Assembly, allegations of 'gapjil' and illegal deployment of security by Kyobo Asset Trust were raised, leading to the summons of Chairman Shin Chang-jae. This was due to controversies over abuse of power against contractors at the Geoje site and illegal forced execution without court orders at the Jukjeon Terrace & 139 project in Yongin.
However, Kyobo Asset Trust reached an agreement with the contractor at the Geoje site just before the scheduled witness appearance, and the summons was withdrawn. Some in the industry speculate whether Kyobo Asset Trust pushed for a hasty settlement to prevent Chairman Shin from attending the audit. Kyobo Asset Trust explained, "The Geoje site had few interested parties because sales were very low, and it was a matter involving the construction company, so an agreement was possible. The settlement was completed last week."
Nevertheless, the question of Chairman Shin's responsibility remains. In political circles, criticism continues that the responsibility for poor management of a subsidiary ultimately lies with the group's CEO. Since Kyobo Asset Trust's deployment of security, Bojeong PJT has been holding one-person protests in front of the Kyobo Life Insurance Building in Gwanghwamun and Kyobo Tower in Gangnam, highlighting Chairman Shin's accountability regarding ethical management.
A Bojeong PJT official pointed out, "I understand that Kyobo promised to discuss the matter without evasion after being urged (at the National Assembly level) to actively resolve the Jukjeon Terrace & 139 issue. However, there has been no significant action since then." They added, "Kyobo Asset Trust is showing an attitude of trying to avoid their own losses regardless of the situation of the developer or the buyers. The problem is that the Kyobo Life Insurance Group, which promotes ethical management, is acting contrary to that—like selling horse meat while displaying a sheep's head."
Kyobo Asset Trust stated, "We will respond according to principle. All matters will be handled in accordance with legal procedures."