Korean builder faces criticism across the board
Daewoo Engineering & Construction (E&C) is one of the largest builders in Korea. But the Seoul-based outfit does not seem to live up to its reputation as a business bellwether.
Lawmakers recently cried foul at Daewoo E&C, which is suspected of having failed to keep regulations. Plus, a flood of complaints inundate the firm about the quality of its buildings.
According to Rep. Kang Hoon-sik of the ruling Democratic Party, Daewoo E&C faced a total of 3,362 consumer complaints during January 2015 and September 2019.
Citing government data, Rep. Kang said that the figure is by far the largest as none other construction companies saw more than 1,000 complaints during the period.
A Daewoo E&C official said that the complaints were mostly about its contractor in 2015 and 2016. He added that as Daewoo stopped transactions with the contractor in question, the number of complaints drastically decreased.
Based on environment ministry data, Rep. Shin Chang-hyun of the Democratic Party said that Daewoo E&C violated construction wastes-related laws 56 times during January 2015 and June 2019.
No other private builders violated the laws more than Daewoo E&C.
The Daewoo official said that the company would revise its system so as not to violate the relevant laws again.
In addition, a total of six workers died at its worksites this year alone. The labor ministry inspected five worksites of Daewoo to find that four of them failed to comply with the regulations.
On a more negative note, Daewoo E&C saw its top line and bottom line deteriorate. During the first half of this year, the entity chalked up 4.26 trillion won in sales and 200.2 billion won in operating profit, down 24 percent, and 41 percent from a year ago, respectively.
“Our performances were very good last year. And this year’s sales and profit were projected to be worse than last year,” the Daewoo official said. “We expect that things would improve next year.”
Against this backdrop, some media conclude that a lack of owners leads to the troubles of Daewoo E&C, whose CEO is Kim Hyung.
Originally, it was a subsidiary of now-defunct Daewoo Group. In 2005, Kumho Asiana Group acquired the company but resold it to the state-run Korea Development Bank in 2010.
Hoban Construction tried to buy the controlling stake of 50.75 percent in Daewoo E&C from the Korea Development Bank early last year but decided not to do so after due diligence.
Back then, worries surfaced over potential looses in Daewoo E&C’s overseas construction projects.