[Newsmaker] HDC chief likely to make public address over Gwangju accident

Amid pressure building over a series of safety accidents at Hyundai Development Co.’s large-scale construction sites in Gwangju, the builder’s chief is likely to make a public address this week, according to insiders Sunday.

A week has passed since an accident at HDC’s 39-story apartment building site in Hwajung-dong in Gwangju, with five people still missing. But HDC Chairman Chung Mong-gyu has remained silent. 

The Gwangju accident is the second case involving HDC. In June, cement walls broke down at an HDC demolition site in the same city, causing 17 casualties. Chairman Chung apologized, vowing “all-out” measures to prevent a recurrence. 

An investigation is currently underway to determine the cause of the latest accident. 

Experts view that it will cost the company time and effort to rebuild public trust as criticism mounts over HDC’s loose safety checks and poor practices.

Gwangju’s mayor said last week that he will find legal measures to restrict HDC from participating in building projects in the city and also order the builder to reconstruct the problematic building from scratch. 

The case is not subject to a reinforced law on safety at construction sites, which is to take effect on Jan. 27.

On the day the accident happened, the National Assembly passed a revision to the Construction Materials Management Act to penalize construction companies for breaches of safety caused by their contractors. In Korea, major construction projects normally involve dozens of subcontractors. For accidents at building sites, the people held responsible are usually onsite leaders, not executives. But the enactment of the new law has been a concern for businesses, as it allows authorities to hold CEOs responsible for accidents.

The series of accidents casts a cloud over Chung, who has been seeking to diversify the builder‘s business portfolio in recent years. 

As the second-generation chaebol scion of the Hyundai empire that led the growth of the nation’s construction and automobiles industries, Chung pursued the expansion of HDC through mergers and acquisitions. HDC partnered with Hotel Shilla to penetrate the duty-free market in 2015 and clinched a deal to acquire a controlling 31 percent stake in the country’s second-largest air carrier Asiana Airlines in 2019. The Asiana deal, however, broke down due to reduced travel amid the coronavirus pandemic. 

HDC’s market presence as the top builder has also been teetering. Once the country’s No. 4 builder in terms of construction capacity, HDC fell to ninth last year. 

Last month, HDC released a smart safety system as the industry’s first, to adopt a risk evaluation model at each stage of construction and bolster risk control monitoring. But no single management-level official has stepped down with moral responsibility following the June accident. 

In the latest year-end reshuffle, HDC appointed economic professional Yoo Byung-koo as its new chief, instead of a construction or safety expert. Yoo joined the company in 2018 after leading Hyundai’s research arm.

HDC Chairman Chung is the eldest son of Chung Se-yung, who is the third brother of Hyundai Group founder Chung Ju-yung. He led Hyundai Motor Group for three years until 1998, but left the carmaker after his cousin, former Chairman Chung Mong-koo, took over the automobile business.

By Kim Da-sol (ddd@heraldcorp.com)