As a cross-ministry joint special inspection team auditing the National Agricultural Cooperative Federation and the NongHyup Foundation has begun its work, NongHyup Financial Group and several local NongHyup cooperatives, which had not been audited until now, were included in the scope.
According to the financial industry on the 2nd, the special inspection team composed of the Financial Services Commission, the Financial Supervisory Service, and the Ministry of Agriculture, Food and Rural Affairs began the audit with 44 people, up from the existing 41 after three additional officials from the Office for Government Policy Coordination took charge overall. The OPC also hinted that staffing could be further expanded. The inspection period is four weeks through the 27th of next month, excluding the Lunar New Year holiday, and the results are expected in March.
In this special inspection, 12 out of about 1,000 local NongHyup cooperatives nationwide were selected as audit targets. They include Seoul Jungang NongHyup, which came under fire at last year's National Assembly audit for accepting gold bars and other valuables, and Gunja NongHyup, where executive corruption surfaced. An OPC official said, "We set the audit targets this time based on the specificity and urgency of the petitions and tips we have collected."
This audit follows a preliminary special inspection conducted in Nov. last year on the National Agricultural Cooperative Federation and the NongHyup Foundation. The regular inspection team usually has five people, but after issues at the NongHyup Foundation surfaced during the National Assembly audit last year, the number was greatly increased to 26.
This year's inspection increased staffing to 44 and broadened the scope to NongHyup Holdings and local NongHyup cooperatives, which observers see as a sign of strong reform resolve by the government and financial authorities. Local NongHyup cooperatives have repeatedly faced allegations of power abuse and misconduct due to inadequate oversight. Bribe-taking and various influence-peddling were also uncovered.
Kang Ho-dong, head of the National Agricultural Cooperative Federation, recently issued a public apology and stepped down as chair of the NongHyup Foundation. The NongHyup Foundation formed a NongHyup reform committee, and the National Agricultural Cooperative Federation launched a trust-rebuilding task force (TF), signaling a willingness to pursue internal reforms.
An official at the financial authorities said, "If the NongHyup organization had been capable of internal control, it would not have come to this," adding, "We plan to thoroughly check the abnormal operations of each cooperative." said.