Minister under fire for conflict of interest over jeonse

By Kim Tae-gyu

Land, Transport and Maritime Affairs Minister Chung Jong-hwan is in hot water for an alleged conflict of interest related to the controversial issue of “jeonse” as well as his dishonesty.

Rep. Kang Ki-gap of the minor opposition Democratic Labor Party revealed Monday that Chung let a large apartment located in central Seoul late last year for 500 million won ($443,000) under the jeonse system.

``Now we understand why he keeps saying that the nation does not need to take steps to help tenants,’’ Kang said, pointing out that the minister is a landlord so he doesn’t pay attention to the plight of tenants, a sentiment reflected in his policy.

``In addition, Chung lied at his confirmation hearing,” Rep. Kang said, calling for Chung’s resignation.

Minister Chung gained the right to buy the Seoul apartment at issue in Dec. 2007. When asked at the hearings in early 2008 he said that his family would reside there but instead he rents it out.

Rep. Kang claimed that Chung has promoted policies geared toward the rights of landlords. The minister lives in an apartment in Sanbon, Gyeonggi Province, which he also owns.

When contacted, the ministry admitted that Chung had signed the jeonse deal late 2010. But it argued, ``Chung bought the Seoul apartment not for investment but for residence. As his current residence in Sanbon is close to the government complex, he decided to stay there. But he will move to the Seoul apartment later.’’

Jeonse refers to a Korea-specific lease of a house. Instead of paying a monthly rent, tenants pay a lump-sum, or jeonse, at the start of a contract.

Landlords are required to return the deposit, which generally amounts to 30 to 50 percent of the property’s value, at the end of a two-year contract.

The values of jeonse dipped after the global financial turmoil but turned around last year across the country as demand is considerably outstripping supply.

Now prices have soared so much that it is now called “the jeonse crisis” in which people can’t afford to pay the increased rates and find themselves stranded.