HDC chief should take full responsibility for collapse
Civic organizations are raising their voices demanding the due punishment of HDC Hyundai Development and its chairman, Chung Mong-gyu, and for them to take full responsibility for the collapse of an apartment building in Gwangju, about 330 kilometers southwest of Seoul. In a press conference in front of the company's headquarters in Yongsan, central Seoul, Monday afternoon, they also called for the establishment of laws to strengthen punishments for those responsible for such serious disasters.
These demands came after the HDC chairman provided an apology for the building's fatal collapse, which left at least one dead and five others missing, vowing to quit his post as the chief of the major real estate developer. The collapse dealt a deadly blow to the firm, as it took place only seven months after a similar deadly construction accident involving the company in the same city that claimed nine lives and injured eight others.
Calls to rectify safety issues have erupted at dozens of HDC construction sites around the nation. Even many residents living in apartments built by the company have demanded the removal of the firm's brand name, "IPark," from the residential complexes' name for fear of their homes declining in value. Chung vowed to take all possible measures ― such as the cancellation of the contract and reconstruction ― should the company be found responsible for bungled safety checks. He, however, said he would keep his chairmanship over the entire HDC Group.
It is inappropriate for Chung to pledge to step down from the post without specifying detailed measures and concrete plans to deal with the disaster, such as the cause, compensation and steps to prevent a recurrence. Chung has invited criticism for attempting to avoid the thorny process of coping with the disaster while maintaining his status as the group's head.
Chung should roll up his sleeves and tackle the recent disaster for his own good, should he wish to continue his job as a leading entrepreneur. HDC Group should also do all that it can to regain public trust. There has been growing anxiety that the Serious Disaster Punishment Act, which is set to pass the National Assembly next week, will undermine the managerial environment for businesses. But this recent case shows that the envisioned act has a greater positive effect than a negative one.
It is not proper for the head of a conglomerate to seek to dodge responsibility for a grave managerial mistake. Evading responsibility could make other Korean companies lose credibility in the global market, wherein mutual trust is the key to the success of a business. This situation is also closely related to the image of Korean enterprises at large, beyond the value of one single construction firm.
The government authorities should pay particular heed to the moves to be taken by HDC Hyundai Development and Chung. In this vein, it is appropriate for Financial Services Commission (FSC) Chairman Koh Seung-beom to indicate the possibility that the FSC could potentially enact the toughest-ever penalties against HDC, including the scrapping of its business license.