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Photo Credit: Prosecution Service |
[Alpha Biz= Paul Lee] Gu Chan-woo, CEO of Daebang Construction, was summoned by prosecutors on Tuesday for questioning over allegations of unfairly supporting subsidiaries owned by his family through a controversial "swarm bidding" scheme to acquire public land.
According to legal sources, the Seoul Central District Prosecutors' Office’s Fair Trade Investigation Division (led by Prosecutor Kim Yong-sik) called in Gu for questioning as a suspect. He had previously been summoned for questioning on March 11.
Swarm bidding refers to the practice where multiple affiliates bid on public land auctions simultaneously, increasing the chances of winning a bid. Prosecutors suspect that Daebang Construction used this tactic to secure public land, then resold it to subsidiaries such as Daebang Industrial Development at an unfair advantage.
A prior investigation by the Fair Trade Commission (FTC) found that from November 2014 to March 2020, Daebang Construction acquired six public land sites through swarm bidding and resold them to five subsidiaries, including Daebang Industrial Development. Daebang Construction is controlled by Chairman Gu Gyo-yoon’s son, CEO Gu Chan-woo, who holds a 72% stake. Meanwhile, Daebang Industrial Development is majority-owned (50.01%) by Chairman Gu’s daughter, Gu Su-jin.
Based on its findings, the FTC imposed corrective orders and a total fine of 20.56 billion won ($15.4 million) on Daebang Construction and its affiliates before referring the case to the prosecution.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
