'Fraudulently obtained apartment reserved for displaced residents now worth 2.2 billion won'

Cheon Ha-ram, acting leader and floor leader of the Reform Party, holds a press conference at the National Assembly's press briefing room Sunday to raise allegations that Kang Shin-cheol, nominee for defense minister, fraudulently obtained an apartment in Seocho-gu through an illegal subscription. [Yonhap]
Cheon Ha-ram, acting leader and floor leader of the Reform Party, holds a press conference at the National Assembly's press briefing room Sunday to raise allegations that Kang Shin-cheol, nominee for defense minister, fraudulently obtained an apartment in Seocho-gu through an illegal subscription. [Yonhap]

Cheon Ha-ram, acting leader and floor leader of the Reform Party, held a press conference at the National Assembly on Sunday, alleging that Kang Shin-cheol, nominee for defense minister, used a fake address registration to obtain a special pre-sale allocation and pocket a market-price gain of around 1 billion won ($736,000).

"Evidence has emerged that the nominee used a fraudulent address registration while serving in the military to qualify as a displaced resident and acquire an apartment in the Seocho Nature Hill 3 complex in Seocho-gu, Seoul," Cheon said.

He added that Kang appeared to have deliberately registered a false address to secure displaced-resident status, then obtained the Seocho-gu apartment — now valued at around 2.2 billion won — through a special pre-sale allocation reserved exclusively for displaced residents.

Cheon sharply criticized the nominee, saying Kang had "posed as a displaced resident to fraudulently obtain an apartment set aside for them and grow it into 2.2 billion won." He questioned whether Kang was not the very embodiment of what President Lee Jae Myung had called "unearned income that destroys fairness and common sense." He called it hypocritical for a government that pledged to escape a "republic of unearned income" to appoint someone who had built his wealth through real estate gains to head the Defense Ministry.

Cheon said his findings were based on an analysis of the nominee's confirmation hearing request documents, property registry records and pre-sale announcements. According to that analysis, Kang received a house in Cheonwang-dong, Guro-gu, Seoul as a gift in July 1997.

Cheon said Kang was appointed deputy regimental commander of the 7th Division's 8th Regiment in Hwacheon, Gangwon Province in July 2007 and immediately registered his address at a military apartment in the area. Eight months later, in March 2008, he and his spouse registered their address at the gifted house in Cheonwang-dong, Guro-gu. In October 2008, Guro-gu acquired the Cheonwang-dong property as compensation for relocation to make way for the Seoul Southern Detention Center, giving Kang displaced-resident status.

"Before May 2009, the nominee re-registered his address at the military apartment in Hwacheon, Gangwon Province where he had previously been registered, and in August 2012 he obtained an apartment in the Seocho Nature Hill 3 complex in Seocho-gu, Seoul through a special pre-sale allocation for displaced residents," Cheon said. He noted that the 84-square-meter unit Kang received through the special allocation had been made available exclusively — 100 percent — to displaced residents under a Seoul urban planning project, meaning no one without displaced-resident status could have even applied. "The pre-sale price at the time was 520 million won, but the current market value has soared to around 2.2 billion won — a gain of roughly 1.7 billion won, or 323 percent," he said.


mkkang@heraldcorp.com