[2026 Audit] 279 Agricultural Corporations Violated Real Estate Ban Over 4 Years... Dissolution Petitions Left to Discretion

2,374 Cases of Business Scope Violations, Including 279 in Real Estate

Corporations Remain if Local Governments Choose Not to Seek Dissolution

Moon Daerim of the Democratic Party Moves to Mandate Dissolution Petitions

It has come to light that even if an agricultural corporation is caught engaging in real estate business, the corporation can continue to exist as long as the local government does not file a dissolution petition with the court. Criticism has been raised that the Ministry of Agriculture, Food and Rural Affairs faces limitations in overseeing these matters at the central government level, as it lacks the legal authority to directly file for dissolution even when it identifies violations.

Moon Daelim, Democratic Party of Korea lawmaker.

According to a survey on the status of agricultural corporations, which Assemblyman Moon Daelim of the Democratic Party of Korea (Jeju City Gap) received from the Ministry of Agriculture, Food and Rural Affairs on October 6, there were 272 cases last year where agricultural corporations operated outside their permitted business scope. Among these, 27 cases involved violations of the regulation prohibiting real estate business.

Over the four years from 2022 to last year, there were a total of 2,374 cases in which agricultural corporations operated outside their permitted business scope. Of these, violations related to the prohibition on real estate business amounted to 279 cases. If an agricultural corporation engages in activities such as real estate business beyond its permitted scope, it can be subject to a dissolution order.

Current legislation regarding the management of agricultural and fishery enterprises states that when the head of a local government confirms a violation by an agricultural corporation, they may file a petition for dissolution with the court. However, as this is not mandatory, there is a possibility that local governments may forgo follow-up measures due to work burden or their own judgement—this is a point highlighted by Assemblyman Moon.

There is also criticism that even if the Ministry of Agriculture, Food and Rural Affairs confirms violations through its surveys, it faces limitations in follow-up management at the central government level since it does not have the authority to directly file for dissolution. Moreover, there is no clear legal basis for the central government to verify whether local governments are actually following through with dissolution petitions or other subsequent actions.

Although agricultural corporations account for only about 0.2% of all farmland ownership in Korea, with approximately 11,540 entities, there have been ongoing concerns that such corporations can be exploited as vehicles for speculative land investment, including scheme-based real estate tactics. A typical example involves purchasing farmland near planned development sites under the name of an agricultural corporation and then dividing up the shares for resale.

The Ministry of Agriculture, Food and Rural Affairs is also pursuing policy measures to classify the operation of real estate business by agricultural corporations as speculative behavior through its recent supplementary farmland survey measures, and plans to issue disposal orders for the farmland in question.

Assemblyman Moon plans to sponsor a legislative amendment to the Law on Management of Agricultural and Fishery Enterprises that would make it mandatory to file for dissolution of such corporations and would also grant the Minister of Agriculture, Food and Rural Affairs the authority to directly petition the court for dissolution.

Moon stated, “If we detect agricultural corporations abusing farmland as a vehicle for speculation but fail to take subsequent action, the intent of comprehensive surveys will be undermined. We will respond strictly to farmland speculation, while making the criteria and targets for corrective action clear to ensure that diligent farmers and agricultural corporations do not face unnecessary burdens.”

This content was produced with the assistance of AI translation services.