A construction company has faced sanctions from regulatory authorities for failing to pay subcontractors and not issuing contracts for additional work.
On July 30, the Fair Trade Commission announced it would impose a fine of 1.03 billion won (approximately $1 million) on Geunryong Construction for violating subcontracting laws. Geunryong Construction primarily builds medical and religious facilities.
According to the commission's investigation, Geunryong Construction did not pay 100 million won to a subcontractor for mechanical work completed during renovations and expansions at Yes Gumi Nursing Home. The company also failed to issue a contract for additional work that was not included in the original agreement.
Additionally, Geunryong Construction received advance payments from the client but did not pass these funds on to the subcontractor. Despite having no valid reasons for exemption, the company also failed to issue a payment guarantee.
The Fair Trade Commission deemed these actions violations of subcontracting laws. Under these laws, primary contractors must pay subcontractors within 60 days of project completion and issue written contracts before work begins. They are also required to pay a proportionate amount within 15 days of receiving advance payments and provide a payment guarantee within 30 days of contract signing. Obligations regarding payment adjustments due to design changes must also be adhered to.
As a result, the commission has ordered Geunryong Construction to pay the fine of 1.03 billion won, along with a payment order and a directive to prevent future violations. The company has also been issued corrective orders regarding the failure to issue written contracts, the non-payment of advance funds, and the lack of payment guarantees, as well as the failure to adjust payments for design changes.
A commission official stated, "We will continue to work diligently to rectify unfair trading practices and protect the rights of subcontractors by strictly sanctioning violations of subcontracting laws."
On July 30, the Fair Trade Commission announced it would impose a fine of 1.03 billion won (approximately $1 million) on Geunryong Construction for violating subcontracting laws. Geunryong Construction primarily builds medical and religious facilities.
According to the commission's investigation, Geunryong Construction did not pay 100 million won to a subcontractor for mechanical work completed during renovations and expansions at Yes Gumi Nursing Home. The company also failed to issue a contract for additional work that was not included in the original agreement.
Additionally, Geunryong Construction received advance payments from the client but did not pass these funds on to the subcontractor. Despite having no valid reasons for exemption, the company also failed to issue a payment guarantee.
The Fair Trade Commission deemed these actions violations of subcontracting laws. Under these laws, primary contractors must pay subcontractors within 60 days of project completion and issue written contracts before work begins. They are also required to pay a proportionate amount within 15 days of receiving advance payments and provide a payment guarantee within 30 days of contract signing. Obligations regarding payment adjustments due to design changes must also be adhered to.
As a result, the commission has ordered Geunryong Construction to pay the fine of 1.03 billion won, along with a payment order and a directive to prevent future violations. The company has also been issued corrective orders regarding the failure to issue written contracts, the non-payment of advance funds, and the lack of payment guarantees, as well as the failure to adjust payments for design changes.
A commission official stated, "We will continue to work diligently to rectify unfair trading practices and protect the rights of subcontractors by strictly sanctioning violations of subcontracting laws."
* This article has been translated by AI.
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