(Korea Times EDITORIAL of January 19)


Lame apology under fire
HDC boss should take full responsibility for the collapse

Civic organizations are raising their voices demanding that HDC Hyundai Development and its chairman Chung Mong-gyu be punished appropriately and held accountable for a residential building collapse in Gwangju, some 330 kilometers southwest of Seoul. At a press conference outside the company’s headquarters in Yongsan, central Seoul, on Monday afternoon, they also called for the introduction of laws to increase penalties for those responsible for such severe disasters.

Those demands came after the HDC chairman apologized for the fatal building collapse that left at least one dead and five others missing, and vowed to step down as chief of the major real estate developer. The collapse dealt a fatal blow to the company as it came just seven months after a similar fatal construction accident involving the company in the same city killed nine people and injured eight others.

Calls for safety issues to be fixed have sprung up at dozens of HDC construction sites across the country. Even many residents of apartments built by the company have called for the company’s “IPark” name to be removed from the name of the apartment complexes, fearing a loss in the value of their homes. Chung vowed to take all possible measures – like terminating the contract and rebuilding – should the company be held responsible for botched security checks. However, he said he would retain his chairmanship of the entire HDC group.

It is unreasonable that Chung pledges to resign from his post without providing detailed measures and concrete plans to deal with the disaster, such as the cause, compensation and steps to prevent recurrence. Chung has drawn criticism for trying to avoid the thorny process of dealing with the disaster while maintaining his status as the group’s leader.

Chung should roll up his sleeves and deal with the recent disaster for his own good if he is to continue his job as a business leader. The HDC Group should also do everything possible to regain public confidence. There are growing fears that the Major Disaster Punishment Bill, due to be passed by the National Assembly next week, will undermine the management environment for companies. But this current case shows that the intended action has a greater positive effect than a negative one.

It is not appropriate for the head of a conglomerate to seek to evade responsibility for a serious management error. Dodging responsibility could result in other Korean companies losing credibility in the global marketplace, where mutual trust is key to a company’s success. This situation is also closely related to the image of Korean companies as a whole, which is beyond the value of a single construction company.

Government agencies should pay special attention to the actions of HDC Hyundai Development and Chung. With that in mind, it is fitting that Financial Services Commission (FSC) Chairman Koh Seung-beom raised the possibility that the FSC could potentially impose the harshest penalties ever on HDC, including the abolition of its business license.


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