Sea One Resort Shows Signs of Distress, Gets 1.6 Billion Won... Who Pushed Shinan's "Guesthouse Purchase"?

Ownership Had Already Been Transferred to Trust Company, Yet County Paid Remaining 1.175 Billion Won
Allegation Former Shinan County Governor Park Woo-ryang Ordered Purchase at Center of Occupational Breach of Trust Probe

Questions are mounting over whether former Shinan County Governor Park Woo-ryang effectively pushed ahead with the project after it emerged that Shinan County in Jeonnam-Gwangju spent 1.676 billion won in county funds to purchase membership rights at Sea One Resort in Jaeun, despite the resort’s unstable management and ownership structure.

An initial rendering of Ssiwon Resort on Jaeundo Island, Shinan County. Provided by Shinan County.

In 2022, the county moved to purchase Sea One Resort membership rights, citing the need to provide employee benefits and use the resort as a guesthouse for outside visitors.

Questions have been raised about the rationale for the purchase after it was confirmed that the resort operator’s financial condition and the ownership of the property were unstable at the time.

In particular, a key focus of the police investigation is the allegation that the purchase was not prompted by an assessment of need by administrative staff, but instead proceeded after former Governor Park instructed the county to buy the membership rights for use as a guesthouse.

The Enforcement Decree of the Tourism Promotion Act stipulates that an operator of a resort condominium business must secure lawful ownership of the land and buildings at the facility before recruiting members. However, when the county paid the remaining balance of approximately 1.175 billion won for the membership rights on November 11, 2022, ownership of the land and buildings at Sea One Resort had already been transferred to Korea Land Trust.

In January of that same year, when the contract was signed, the project developer, Jio Group, owned some of the land. By the time the remaining balance was paid, however, the ownership structure had changed substantially. Despite this, Shinan County paid the large outstanding sum without suspending the contract or reassessing the legal risks.

As a result, the county spent more than 1.6 billion won in taxpayer funds on a resort where the security of the membership rights was difficult to guarantee. Under normal circumstances, the county should have rechecked the land registry, the trust agreement, the eligibility to recruit members, and the operator’s financial condition before paying the remaining balance. It has not been confirmed whether these checks were properly carried out.

Signs of financial distress at Sea One Resort became apparent soon after the remaining balance was paid.

Just months after the county paid the full cost of the membership rights, proceedings to publicly auction the trust property began in February 2023 following the developer’s default. The county had signed a contract under which it would receive the membership fee back when the 10-year term expired, but as the operator’s financial condition worsened, even the prospect of recovering the principal became uncertain.

This has raised questions about whether county officials knew in advance of the operator’s financial condition and changes in ownership, yet paid the remaining balance because of orders from their superiors.

People in local political circles say it should first be clarified why former Governor Park ordered the purchase of the guesthouse when it was difficult even to be certain that Sea One Resort could be operated stably.

If a facility was needed for employee benefits, the county could have considered acquiring a county-owned building or leasing one long-term. Instead, Shinan County spent more than 1.6 billion won at once on membership rights at a private resort. The arrangement put both the value of the membership rights and the refund at risk if the operator ran into financial trouble or the property faced a public auction.

The investigation must determine whether former Governor Park was informed of the operator’s financial condition and changes in ownership, how the results of the legal review were conveyed before the remaining balance was paid, and whether staff recommended suspending payment or reconsidering the purchase.

If former Governor Park was unaware of the issues, it would be difficult for him to avoid responsibility for inadequate management and oversight of a large-scale budget project. Conversely, if he knew of the ownership and financial risks but still directed the county to proceed with the purchase, questions could also arise over whether he committed occupational breach of trust and granted preferential treatment to the operator.

Meanwhile, police are investigating suspected occupational breach of trust, focusing on the purchase of the membership rights, the circumstances surrounding payment of the remaining balance, and the decision-making process.

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