HDC Hyundai Development may announce restructuring after chairman resigns Korean building company likely to enhance safety management after building collapse

Translated by Ryu Ho-joung 공개 2022-01-19 08:14:33

이 기사는 2022년 01월 19일 08:12 더벨 유료페이지에 표출된 기사입니다.

South Korean builder HDC Hyundai Development Company may restructure operations and shake up executives after HDC Group chairman Chung Mong-gyu decided to resign over the recent collapse of a building in Gwangju which left at least one person killed and five others missing.

At a press conference on Monday, Chung announced that he would take full responsibility for the accident and step down as chairman of HDC Hyundai Development, apologizing to the victims, their families and the public.

Chung pledged to reform the company to “transform it into a new one,” suggesting that major organizational changes or executive moves could follow.

Since 2018, Chung has been gearing the company to focus on building a more agile and efficient structure in an effort to respond quickly to external changes.

In line with this, Yoo Byeong-gyu, co-chief executive of HDC Hyundai Development, was promoted to president in 2020. He led HDC’s shift to a holding company structure in 2018. An economic expert, Yoo served as head of economic research at Hyundai Research Institute and president of the Korea Institute for Industrial Economics & Trade before joining HDC in March 2018.

At the beginning of last year, HDC Hyundai Development created a task force to enhance management efficiency. It has since significantly reduced costs, but this has been overshadowed by the collapse of two buildings under construction by the company only in the past seven months.

“Criticism is growing that the company focused too much on speed and efficiency and not enough on safety management as a building company,” an industry insider said. “Considering that the company’s public image has been severely damaged, additional actions such as an executive reshuffle could come after chairman Chung’s resignation.”

The National Pension Service of South Korea, one of the company’s major shareholders with an 11.6% stake, could play a more active shareholder role in the future. On Monday, a civil group issued a statement urging the state-controlled pension scheme to nominate an industrial safety expert for a board seat at HDC Hyundai Development.

It is likely that the company’s safety management system will be overhauled this time. HDC Hyundai Development did not create a role of chief safety officer or expand its safety management team even after a five-story building in Gwangju collapsed on a bus and killed nine passengers in June 2021. (Reporting by Jin-young Ko)
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