[비즈한국] NongHyup Chairman Kang Ho-dong is facing bribery allegations. The National Assembly is reportedly planning to grill Chairman Kang on these charges during the upcoming state audit on the 24th. The financial sector is paying close attention to whether Chairman Kang will exercise his personnel authority over NongHyup subsidiaries. In the past, Chairman Kang clashed with NH NongHyup Financial Group over personnel appointments at NH Investment & Securities005940. While some predict he may attempt to exert his influence again, others analyze that he will likely act with caution due to the ongoing bribery probe.
The Anti-Corruption Investigation Unit of the Seoul Metropolitan Police Agency raided the offices of the National Agricultural Cooperative Federation (NongHyup) on the 15th. Chairman Kang Ho-dong is suspected of receiving bribes during his election campaign for NongHyup chairman last year. The allegations suggest he received over 100 million won in cash and gifts from the representative of a service company that has business dealings with NongHyup subsidiaries. The police plan to summon Chairman Kang and the company representative for questioning after finishing their analysis of the seized evidence.
Chairman Kang has continued his management activities despite the raid. On the 16th, he gave a special lecture at the NongHyup Central Training Institute, and on the 17th, he attended a demonstration of agricultural work agency services and a proclamation ceremony for agricultural machinery parts distribution innovation in Sejong City. On the surface, he appears unfazed by the police raid.
However, Chairman Kang’s future remains precarious. He is scheduled to attend the National Assembly’s Agriculture, Food, Rural Affairs, Oceans, and Fisheries Committee state audit on the 24th as a witness. The National Assembly’s view of NongHyup is already critical. Last September, the office of Democratic Party lawmaker Yoon Joon-byeong pointed to financial accidents at NongHyup Bank, criticizing that “although Chairman Kang Ho-dong promised thorough audits through computer system upgrades and personnel reinforcement, financial accidents have shown no improvement at all.”
The financial sector is focusing on NH Investment & Securities, one of NongHyup's core subsidiaries. The term of NH Investment & Securities CEO Yoon Byeong-woon ends next March. Some in the financial industry expect his reappointment. Since CEO Yoon took office, NH Investment & Securities has seen improved performance and has established mid-to-long-term goals, such as pursuing the Integrated Management Account (IMA) business and achieving a Return on Equity (ROE) of 12%.
However, some suggest that CEO Yoon’s reappointment will not be easy. Last year, when the NH Investment & Securities CEO was being selected, Chairman Kang Ho-dong recommended former NongHyup Vice Chairman Yoo Chan-hyung. However, he had to step back due to opposition from NH NongHyup Financial Group and pressure from financial authorities. If Chairman Kang attempts to exert influence on the appointment of the NH Investment & Securities CEO again, CEO Yoon's reappointment cannot be guaranteed (Related article: Eyes on 'External Variables' Regarding Potential Reappointment of NH Investment & Securities CEO Yoon Byeong-woon).
In the past, former NongHyup Chairman Jung Dae-keun was dishonorably dismissed in 2007 after being sentenced to five years in prison for bribery. In Chairman Kang Ho-dong's case, even if the allegations are true, it is difficult to reach a conclusion before next March considering trial schedules. Nevertheless, the financial sector suggests that Chairman Kang will likely refrain from conspicuous actions such as exercising personnel authority.
A financial sector official stated, “Since there is still time left before the personnel appointments for NongHyup CEOs, the situation could change depending on the progress of the police investigation,” but added, “Chairman Kang Ho-dong has already caused various noises regarding personnel decisions since taking office; it seems unnecessary for him to draw the attention of the National Assembly or law enforcement agencies, even if the allegations are untrue.”
There are also differing opinions. Chairman Kang has continued his field management even after the raid, which some interpret as a sign that he will not downsize his influence or authority. In fact, the National Agricultural Cooperative Federation is strongly denying the chairman's charges. A NongHyup official dismissed the allegations against the chairman as “the one-sided claims of an informant.”