Police have launched an investigation into Seoul Jungang NongHyup, which became a problem after it promised members "gold dividends" and free overseas tours and won the cooperative head election. The Jungang NongHyup cooperative side argues it was "dividends in accordance with the bylaws."
According to police on the 15th, the Gwangjin Police Station in Seoul recently opened an investigation into Jungang NongHyup in Jayang 1-dong, Gwangjin District. Police plan to examine whether there were violations of the Act on the Election of Public Organizations and Entrusted Elections or possible breach of duty over Cooperative Head Kim Chung-gi of Jungang NongHyup having pledged cash and free overseas tours as campaign promises during the last cooperative head election.
The case occurred during the nationwide simultaneous cooperative head elections in March 2023. Under Article 268, Paragraph 1 of the Public Official Election Act, the statute of limitations for election crimes is six months, so investigative authorities cannot investigate. However, police noted there is room to scrutinize the timing because the pledge was carried out this year, and they will check whether there were false reports or budget misuse during project implementation.
During the 2023 election, Kim promised to give gold—such as a gold badge, gold key, and gold toad—totaling 15 don, as well as free overseas tours, and was elected. After the election, gold bars promised to members were distributed, and free overseas tours were offered through early this year. They are currently suspended due to budget shortages.
Seoul Jungang NongHyup argues the payments were lawfully made after a general meeting. It says the payouts were within the scope of dividend activities permitted by the cooperative's bylaws and relevant laws. Cooperatives such as NongHyup and credit unions have the authority under the Framework Act on Cooperatives or the Agricultural Cooperatives Act to distribute business profits as dividends to members. In other words, the payments were distributed as dividends in the nature of business profits.
Amid the controversy, the National Agricultural Cooperative Federation and the competent ministry, the Ministry of Agriculture, Food and Rural Affairs, conducted a three-day comprehensive audit early this month. Earlier, after Kim was elected cooperative head, the federation audited Jungang NongHyup and closed the case, finding no issues, but with the recent controversy, it carried out a comprehensive audit again. The audit results are expected to be notified to the cooperative by the end of this month.
The National Assembly's Agriculture. Food. Rural Affairs. Oceans. and Fisheries Committee also plans to question the moral responsibility of NongHyup cooperatives at the government audit on the 24th. It is expected to take issue with points such as major regional cooperatives, including Seoul Jungang NongHyup, engaging in vote-buying-style projects at a time when cooperatives are being criticized daily for joint lending or arrears rates. Meanwhile, ChosunBiz made several attempts to contact Kim and Jungang NongHyup but could not obtain a response.