[비즈한국] Kang Ho-dong, Chairman of the National Agricultural Cooperative Federation (NACF), has issued a public apology. Following the Ministry of Agriculture, Food and Rural Affairs (MAFRA) releasing the interim results of a special audit and rising public outcry over various allegations of misconduct, the NACF announced a public apology and a reform plan on January 13. On the same day, Chairman Kang resigned from his roles as Chairman of the Nongmin Newspaper and Chairman of the Nonghyup Foundation. The NACF also announced the establishment of a 'Nonghyup Reform Committee' composed of external experts to address issues across the organization.
At the NACF headquarters on the 13th, Chairman Kang issued a statement saying, "I am acutely aware of the severe criticism following the announcement of the interim audit results by the Ministry of Agriculture, Food and Rural Affairs," adding, "I will address the follow-up procedures with a sense of responsibility. I will not let this end as a simple crisis management measure, but will use it as a starting point to restore the reason for existence and the role of Nonghyup."
MAFRA conducted special audits on the NACF and the Nonghyup Foundation between November and December 2025. This followed various allegations of misconduct involving Chairman Kang and Nonghyup last year. Chairman Kang was accused of receiving approximately 100 million won in money and valuables from a service provider doing business with an affiliate during the NACF chairmanship election in January 2024. During the 2025 parliamentary inspection, concerns were raised regarding Chairman Kang's bribery allegations, as well as Nonghyup's lax internal audit system and issues with bribery in cooperative head elections.
A flood of issues was uncovered in the interim audit results from MAFRA. The items to be notified by the ministry in January include: problems in the composition and operation of internal control bodies, the reduction of disciplinary actions against employees, issues with fund and expense execution, closed and opaque contracting practices, and opaque management of the Nonghyup Foundation. Specifically, although the appointment of the Audit Committee for Member Cooperatives is legally guaranteed to be independent, it was found that this was not honored, with the committee reporting personnel rankings to the Vice Chairman. Regarding the reduction of disciplinary actions, there were cases where criminal allegations such as sexual misconduct and professional malpractice were ignored without being reported or reviewed.
Inappropriate use of funds and expense execution were also highlighted. Although the NACF Chairman's accommodation allowance for overseas business trips is capped at $250 (approximately 360,000 won) per night, it was discovered that he spent between 500,000 and 1.86 million won per night. Furthermore, while the Act on Disclosure of Public Agency Information requires disclosure of business promotion expenses, it was not disclosed under the pretext that 'the corporate card was assigned to the secretary's office.' It was also confirmed that special activity allowances of 3 to 4 million won were paid regularly every year to non-standing directors, auditors, and members of the cooperative audit committee without any activity logs or supporting documents.
Additional audit findings identified areas requiring investigation requests or corrective measures. MAFRA stated, "We plan to review whether it is legal and appropriate for the NACF Chairman to concurrently serve as the Chairman of the Nongmin Newspaper and receive double salaries, allowances, and severance pay," and added, "We will also review the execution status and validity of the 'direct compensation' item, through which the chairman and executives receive approximately 1.3 billion won per year." Two cases uncovered during the audit—allegations of legal fees paid for criminal cases involving NACF employees and allegations of malpractice by Nonghyup Foundation employees—were referred to the police for investigation on January 5.
MAFRA also pointed out the rapidly increasing delinquency rate of NACF member cooperatives, the fact that Nonghyup Agribusiness Group paid special performance bonuses despite recording an operating loss of 81 billion won in 2024, and that organizations responsible for internal control, such as the Audit Committee, were composed of internal and external associates. Additionally, the ministry signaled that it would conduct further checks on numerous other reports of misconduct.
The NACF and Chairman Kang announced four reform measures following the interim audit results. First, they will adjust the chairman's authority and pursue personnel reform. To clarify the authority of the NACF Chairman, Kang will resign from his posts as Chairman of the Nongmin Newspaper and Chairman of the Nonghyup Foundation. Major executives, including the Senior Executive Director, the President of Mutual Finance, and the President of the Nongmin Newspaper, will also step down to take responsibility. Chairman Kang stated, "I will entrust overall management, including personnel decisions, to the business-specific CEOs and focus my efforts on my core duties: developing agriculture and rural areas and promoting the rights and interests of farmers."
Issues identified in the interim audit will be supplemented systemically. Specifically, regarding the excessive use of overseas accommodation expenses, Nonghyup explained, "We plan to reasonably reorganize the overseas accommodation expense limit, which was capped at $250 due to outdated regulations, by reflecting current price levels." Chairman Kang will personally return the amount that exceeded the accommodation limit. Chairman Kang said, "I apologize regardless of the reason for the costs spent exceeding the daily accommodation allowance during overseas business trips," adding, "I will ensure the full reimbursement of the relevant costs and completely reorganize the systems and procedures to fit reality."
A 'Nonghyup Reform Committee' will also be formed to improve structural problems across Nonghyup. The committee plans to prepare reform measures to enhance the transparency of cooperative management, including improvements to the election method for the NACF Chairman, governance structures, and the election system for cooperative heads. The committee will consist of experts from various fields, including legal, academic, agricultural, and civic sectors, and will be headed by an external expert.
The organization also expressed a will to actively participate in the government's major agricultural reform policies. It plans to link Nonghyup's projects with key agricultural tasks such as reforming the distribution structure of agricultural products, expanding smart farming, fostering young farmers, and public-type seasonal labor projects. It also stated that it would strive to shift toward 'profitable farming' to increase farmers' income.
Chairman Kang bowed his head, saying, "Nonghyup has done its best for agriculture, rural areas, and farmers over the past 65 years, but I deeply apologize for failing to meet the expectations of the public," adding, "I will be more faithful to my core roles and restore public trust."
However, it remains uncertain whether such a public apology and reform plan will help restore trust. Although Chairman Kang apologized in person, there was no explanation regarding personal allegations such as bribery. It is also noteworthy that while many executives resigned, Chairman Kang only stepped down from his concurrent positions. Chairman Kang, who took office in March 2024, has a four-year term and has not yet completed two years in office.
Furthermore, the NACF's reform plan did not include measures to change the closed personnel composition of its internal control bodies. There was also no mention of special allowances or 'direct compensation' paid to executives, such as non-standing directors and audit committee members, without supporting documentation.