[Edaily Marketin JI YEONG-EUI Reporter] The National Pension Service (NPS) has abruptly placed the head of its Real Estate Investment Division on administrative leave amid controversy over conflicts of interest and collusion within the division. Notably, two senior officials from the Compliance Support Office—which is responsible for internal controls within the Fund Management Headquarters—were also removed from their duties. This suggests that the fallout from the failed replacement of the general partner (GP) for the “Yeoksam Centerfield” project is spreading into a “chain of disciplinary personnel actions.”

According to the investment banking (IB) industry on the 17th, the National Pension Service issued a suspension order that day against Mr. Ahn, head of the Real Estate Investment Division. It has been confirmed that this measure was carried out following approval by Kim Seong-ju, Chairman of the National Pension Service. According to E-Daily’s investigation, the basis for this suspension is “Article 20, Paragraph 6 of the National Pension Service Personnel Regulations.” This provision stipulates that a suspension may be imposed for up to six months “in cases where it is determined that the smooth and normal performance of duties is difficult due to public or private circumstances.” A suspension is a personnel measure that removes an employee from their duties pending the finalization of disciplinary action, and it is interpreted as a measure linked to the ongoing re-audit of the Real Estate Investment Division.

In addition to the head of the Real Estate Investment Division, two senior officials from the Compliance Support Office were also placed on administrative leave. It is reported that they were held accountable for failing to properly monitor potential conflicts of interest related to the Real Estate Investment Division in advance. It appears that the scope of the review is expanding beyond a problem limited to a specific investment division to encompass the Fund Management Headquarters’ internal controls and compliance monitoring systems as a whole.

It is reported that the National Pension Service’s Audit Office is currently reexamining the process of replacing the Centerfield GP, the Real Estate Investment Division’s exercise of its authority, allegations of abuse of power toward asset managers, and suspicions of conflicts of interest. Previously, the National Pension Service conducted an audit into allegations of collusion involving the Real Estate Investment Division; however, amid the confusion surrounding the change in chairpersons, the audit was concluded without any significant action, sparking controversy over a “self-audit.”

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In particular, Director Ahn is expected to face a focused review during the re-audit regarding the background behind the “forced replacement of the Centerfield GP”—a move criticized for lacking both practical benefit and justification—as well as the process for selecting Koramco Asset Management as the preferred bidder and the legal and economic appropriateness of replacing the existing asset manager. The fact that Koramco Asset Management hired a former high-ranking NPS official as the head of its Jeonju office, coinciding with the timing of the GP replacement push, has also come under scrutiny.

Yeoksam Centerfield is a prime office building in Seoul’s Gangnam district in which the National Pension Service invested with Aegis Asset Management serving as the GP. The National Pension Service’s Real Estate Investment Division pushed for a plan to replace the office’s GP from Aegis Asset Management to Koramco Asset Management, but the proposal was blocked by the Alternative Investment Committee, the final decision-making body. The legal and economic appropriateness of a structure that would pay the existing manager a large success fee and equity profits even before the actual sale of the asset took place became a point of contention. Critics pointed out that there was no reason to push for an unreasonable replacement.