Allegations of bid collusion and fraudulent track record submissions have simultaneously emerged in the bidding process for the Phase 3 sales agency contract of the Songdo Overseas Korean Town (Global Town). Critics say that Incheon Global City, the public developer, failed to properly manage the bidding procedures for a project involving hundreds of billions of won in commission fees.
▲ Two firms with close ties submit separate bids
According to the Seoul Economic Daily's investigation on the 25th, five sales agencies participated in the Phase 3 Global Town sales agency bid. Among them, Company A and Company B were found to have maintained a close collaborative relationship dating back years.
Their partnership traces back to March 2024, when Songdo International Complex Development conducted apartment sales for its complex. At the time, the developer selected Company A as the official sales agent. However, when initial sales faltered, Company A outsourced so-called "organizational sales" to Company B.
Organizational sales is an industry practice in which a sales agency hires division heads who run their own separate businesses to absorb remaining inventory. In a broader sense, it refers to a sales agent re-delegating marketing work to another sales firm. In effect, Company B was a subcontracted agency working under Company A — not under the developer.
This cooperative relationship continues to this day. At a site in Songdo Block 11 that has been on sale since December 2025, Company A handles the primary sales while Company B manages organizational sales. The contract rate at this site is reportedly stuck at around 10%.
For this reason, industry insiders suspect that while the two firms entered the Global Town Phase 3 bid as separate entities, they may have coordinated a joint strategy to increase their chances of winning the contract.
In Songdo's real estate brokerage community, it is widely understood that the two firms' winning of the Phase 3 sales contract is all but confirmed.
"A managing director from Company A, which handles sales in Songdo Block 11, recently visited and conveyed the Phase 3 sales plan as almost finalized," said Song, a real estate brokerage office representative. "Phase 3 is attracting huge interest in Songdo's property market because of its scale and talk of a tram installation, so it stuck in my memory."
▲ Company B passes bid with organizational sales record
The issue centers on Company B submitting track records from the Songdo International Complex Development project for this Phase 3 bid. Since Company B only handled organizational sales at the time, it holds what amounts to "subcontracted performance records." Its passage through the bid screening using such records has sparked controversy.
The entity that directly contracted with Songdo International Complex Development was Company A. Even if Company B did the actual work, the overall sales performance belongs to Company A because of the legal authority and liability held by the primary sales agent. In particular, Company A bears joint civil, criminal, and administrative liability for the sales alongside the developer.
In other words, even if Company B executed 100% of the sales, it did so under Company A's direction and bears no legal responsibility. As such, the track record Company B submitted is essentially Company A's original contracted performance — tantamount to submitting a fraudulent record.
The CEO of Songdo International Complex Development, which issued the performance certificate, said, "Company B requested a certificate for the portion of sales it practically handled, and I understand our staff issued it based on facts. Company B resolved the initial poor sales problem."
▲ Acknowledging the record would constitute bid-rigging and performance fabrication
Legal experts have warned that criminal prosecution is possible in this case.
Lee Seung-gi, an adjunct professor at Sogang University and managing attorney at Riel Partners, said regarding the collusion allegations, "If the two firms participated in the bid disguised as separate companies under a prior agreement, this could constitute the crime of bid obstruction." He added, "It could also amount to unfair collaborative practices under the Fair Trade Act."
On the fraudulent track record submission, Lee said, "If organizational sales records with no direct contractual relationship with the developer were submitted as sales agency performance, this constitutes false document submission. The developer that knowingly issued the performance certificate could also bear conspiracy liability."
Legal circles have raised the possibility of multiple legal violations involving not only Company A and Company B but also the developer that issued the performance certificate. Lending one's track record constitutes an illegal act under the Subcontracting Act. Participating in a bid with false records triggers the crime of bid obstruction under the Criminal Act. Winning a sales agency contract with fraudulent documents violates the Housing Act. Producing documents that certify nonexistent performance constitutes forgery of private documents. Using false records for promotional purposes also violates the Fair Labeling and Advertising Act.
"Track records are intangible rights and cannot be separately bought or sold," Professor Lee said. "Purchasing only the track record without a merger or business transfer is illegal." He added, "Retroactively converting performance completed under Company A's name to Company B's constitutes 'performance laundering.'"
If Company A acknowledges Company B's claim to its performance, this represents a textbook case of illegal bid-rigging and performance fabrication through "laundering," according to legal analysts.
▲ Hundreds of billions of won in commissions behind the allegations
At the root of the allegations surrounding this bid lies a massive sales agency commission.
Global Town Phase 3 (Songdo Block 11-1) is a large-scale complex comprising 14 buildings of up to 44 stories with 1,700 units. Assuming an average sale price of 800 million won ($590,000) per unit, total sales revenue would reach 1.36 trillion won ($1 billion). Applying the 5% to 5.5% commission rates from Phases 1 and 2, the Phase 3 commission could approach as much as 75 billion won ($55 million).
Incheon Global City reportedly tried to lower the commission rate to 2%, but even that would exceed 27 billion won ($20 million). This is an exceptionally generous level compared with the less than 1% commissions that major construction firms typically pay. Industry insiders expect the final commission to settle at around 15 billion won ($11 million).
With hundreds of billions of won in commissions at stake, various allegations have emerged surrounding the bidding process. As the controversy grew, Incheon Global City transferred the authority to select the sales agency to the construction contractor. On the 23rd, Hoban Construction was named the preferred bidder for Phase 3 construction, meaning Hoban will also be responsible for selecting the sales agent.
In response, Company B said, "We submitted our bid documents properly, so naturally we passed the PQ (pre-qualification screening). For questions about the acceptance of performance certificates, please contact Incheon Global City."
A Company A official said, "Company B handled organizational marketing for our sales project at Songdo International Complex Development. We never received a request to issue a performance certificate, and this is news to us. We submitted our own Songdo International Complex Development performance certificate for this bid."
The Seoul Economic Daily made multiple requests for comment from Incheon Global City but received no response.