Hoban Construction Co., Ltd., which was hit with a penalty bomb for "herd bidding" to win public housing by mobilizing a number of affiliates, was sentenced to cancel some of the fines. Analysts say that the Fair Trade Commission may have pushed for a "backward" penalty at a time when contracts for housing sites that were sold amid a slump in the housing market were canceled one after another.

On the 27th, the Seoul High Court Administrative Department 7 (Chief Judges Koo Hoe-geun, Kim Kyung-ae, and Choi Dae-eun) ruled that Hoban Construction won some of the plaintiffs in a lawsuit filed against the Fair Trade Commission to cancel the correction order and fine payment order. Of the 60.8 billion won in fines imposed by the FTC on Hoban Construction, the FTC ruled to cancel 36.461 billion won in fines for reselling public housing, which is equivalent to a "bee-tender." According to the Fair Trade Commission, Hoban Construction won 23 public housing bids by mobilizing its affiliates between 2013 and 2015, and transferred them to Hoban Construction Housing and Hoban Industries operated by former chairman Kim Sang-yeol's eldest and second son. In the process, Hoban Construction lent the bid for the second-generation company free of charge, and even after the transfer of the housing site, it provided work, manpower, and project financing (PF) loan payment guarantees (2.63 trillion won) throughout the entire project. The FTC judged that Hoban Construction engaged in unfair internal transactions for the purpose of expedient succession of management rights. On the other hand, the court said, "The fair sale of land to affiliates is not a problem under the Fair Trade Act," and issued a fine cancellation for "the act of reselling public housing" and "the act of free lending of bidding applications." As a result, Hoban Construction will pay only about 24.341 billion won in fines for PF loan payment guarantees for public housing projects and transfer of construction work.

Hoban Construction plans to appeal to the Supreme Court after reviewing the Seoul High Court's ruling. Attention is focusing on whether the ruling will affect other construction companies that are under sanctions for bee bidding. Recently, CEO of Daebang Construction Co., Ltd. Koo Chan-woo was indicted without detention on charges of supplying work to a company run by his relative through a beehive bidding.

[Reporter Wi Jihye]