GS E&C’s business license has been suspended for eight months for the collapse of an underground parking lot that occurred in 2023. A lot of attention is now being paid to whether its business operations will be affected by the suspension.
According to sources in the construction industry on Feb. 2, GS E&C received an eight-month business suspension from the Ministry of Land, Infrastructure, and Transport (MOLIT). Four other construction companies -- Dongbu E&C, Daebo E&C, Sangha E&C, and Asia General Construction -- were also included in the list. An eight-month business suspension is the highest level of administrative penalties that MOLIT can impose on a builder for defective construction that does not result in a fatal accident.
MOLIT announced in August 2023 that it will proceed with an eight-month business suspension against GS E&C, held a meeting of the Administrative Disposition Review Committee, and carried out a hearing with the participation of GS E&C and other parties. The ministry judged that GS E&C and five other companies had built the facility intentionally or grossly negligently, causing major damage to its structure according to the Construction Industry Basic Act.
In January, GS E&C received a one-month business suspension, the strongest penalty, from the Seoul Metropolitan Government for failing to conduct quality inspections. The city plans to issue a disciplinary action for failing to conduct safety inspections in March. If a one-month suspension is added, GS E&C will be suspended for a total of 10 months.
GS E&C immediately appealed MOLIT's decision. GS E&C said that it fulfilled all its obligations as a general contractor by going through the hearing process after receiving a pre-disposition notice from MOLIT and Seoul and submitting an additional letter of its opinions.
As a result of the suspension, GS E&C will not be allowed to engage in civil engineering, architecture, and landscaping but its plant, environmental, and overseas businesses will be able to continue, and it is able to prepare to some extent during the lawsuit period. However, some observers say that it will be inevitable for the builder to suffer damage to its corporate image, which may be disadvantageous when GS E&C seeks to take future domestic and overseas business orders.