The curtain has risen on the first parliamentary audit since the launch of the Lee Jae-myung administration. The National Policy Committee, whose audited bodies include financial authorities and financial companies, is expected to take aim squarely at Lotte Card, which suffered a hacking incident, and MBK Partners, the private equity firm that is the largest shareholder of Homeplus, which is undergoing corporate rehabilitation proceedings. However, with all major financial holding group chairmen and bank CEOs omitted from the list of witnesses and reference persons for this audit, criticism is mounting that it could become an "empty audit." Discussions on issues such as household debt management and tighter lending regulations, as well as financial accidents caused by internal control failures, appear likely to be pushed down the priority list.
According to the financial and political sectors on the 13th, the National Policy Committee will begin this year's parliamentary audit on the 14th, starting with the Personal Information Protection Commission and the Fair Trade Commission. On the 20th, audits will be conducted on the Korea Development Bank and Industrial Bank of Korea (IBK), and on the 21st, on the Financial Supervisory Service, Korea Deposit Insurance Corporation (KDIC), and Korea Inclusive Finance Agency (KINFA), among others. The comprehensive audit will be held on the 27th.
In connection with the personal information leak stemming from the Lotte Card hacking, the committee has selected MBK Chairman Kim Byung-joo and Lotte Card CEO Cho Joa-jin as witnesses. At Lotte Card, an external hack last month led to the leak of personal information of 2.97 million customers. For some, even sensitive credit information such as card numbers, CVC numbers (the three digits on the back of the card), and resident registration numbers was exposed. In addition, regarding the Homeplus case—sparked by excessive liability and a credit rating downgrade in 2015, which led to an application for corporate rehabilitation in March—MBK Vice Chairman Yoon Jong-ha, Homeplus CEO Kim Kwang-il, and Homeplus Co-CEO Cho Ju-yeon have also been summoned.
During the audit, MBK's management accountability is expected to come under scrutiny. The argument is that the management practices of private equity funds, which pursue only short-term revenue, have led to inadequate internal controls and deteriorating performance, resulting in these outcomes. A National Policy Committee official said, "Instead of enhancing corporations' competitiveness through investment, they end up spending all the money they make to repay the excessive debts incurred for acquisitions, which is why these problems arise," adding, "We are preparing the audit with the goal of elevating stronger regulation of private equity funds as a social agenda."
In addition, the soundness of mutual finance institutions such as Saemaul Geumgo and credit unions, and their failures in internal control, are expected to be focal points. As of the first half of this year, 174 out of 1,265 Saemaul Geumgo branches nationwide were in a state of capital impairment. Capital impairment means that accumulated losses have wiped out all retained earnings and, on the books, have even eaten into the investment (capital) paid in by customers. There were 127 branches with retained earnings in deficit (negative). The fallout stems from bad loans in real estate project financing (PF), and credit unions are also seeing a spate of cooperatives with capital impairment. Credit unions are facing controversy over lax internal controls as a significant number of virtual accounts issued by some cooperatives have been used as funding channels for illegal gambling sites.
The CEO of Dunamu, which operates the virtual asset exchange Upbit, was also placed on the witness list. Over the past two years, no virtual asset industry figures were included on the National Policy Committee's witness list for the parliamentary audit. In the non-financial comprehensive audit, the head of Myeongnyundang, which recently engaged in illegal lending targeting franchisees, was included. Myeongnyundang is the operator of Myeongnyun Jinsagalbi, a pork rib franchise with more than 600 franchises. At the center of this controversy is the Korea Development Bank. The bank has come under fire for approving loans totaling 24 billion won despite being aware of Myeongnyundang's suspected illegal lending.
Meanwhile, the management of the largest financial holding groups and banks in the financial sector were excluded from the witness list. In the "2025 Parliamentary Audit Issue Analysis" report published last month, the National Assembly Research Service said that supplementary measures for household debt management, improvements in real estate PF, and discussions on institutionalizing won-based stablecoins are needed. Regarding the controversy over banks' "interest business," the Research Service said, "Despite the recent decline in the base rate causing deposits rates to fall quickly, the banking sector has been reluctant to cut lending rates, citing reasons such as total household loan management, so it is necessary to enhance banks' social responsibility."