In the process of providing policy funds for small and medium-sized venture businesses and small merchants, so-called "illegal brokers" were reported 228 times in two months. The Korean National Police Agency defined this as a "livelihood and price disruption crime" and will launch a special crackdown.
The Ministry of SMEs and Startups said on the 12th that it held the fourth meeting of the "task force (TF) to resolve third-party improper involvement" at the Korea Credit Guarantee Fund (KODIT) Front1, chaired by First Vice Minister No Yong-seok, with the Korean National Police Agency, Financial Supervisory Service (FSS), Korea Institute of Startup and Entrepreneurship Development (KISED), and others participating.
At this fourth TF meeting, participants discussed the status of reports received and action plans at the "illegal broker reporting center," which has been set up and operated since Jan. 1 this year at four policy finance institutions—the Korea SMEs and Startups Agency (KOSME), the Small Enterprise and Market Service, Korea Technology Finance Corporation (KOTEC), and the Korea Federation of Credit Guarantee Foudations (KOREG)—as well as plans for cooperation with related agencies, including the Korean National Police Agency.
Over two months, 228 reports were received through the "illegal broker reporting center." Most reports, accounting for more than 80%, were civil petitions that could be handled or closed by the four policy finance institutions themselves through guidance on related matters, such as inquiries about whether they constituted third-party improper involvement. For some reports, authorities are identifying additional facts about whether they constitute third-party improper involvement or, having determined there is illegality, are reviewing sanction measures.
For example, among the reports under consideration for sanctions, there was content related to impersonation of policy finance institution employees. The Ministry of SMEs and Startups (MSS) and the policy finance institutions judged that there may be violations of current laws and will request investigations or inquiries by relevant agencies. They also plan to review imposing fines under the Small and Medium Enterprises Promotion Act or the Small Enterprise and Market Support Act. Considering the importance and specificity of the case, they will also pay a reporting reward to the informant based on the reporting reward system introduced at the end of Jan.
The Korean National Police Agency, which attended the meeting, will include the illegal broker issue as one of the "livelihood and price disruption crimes" and carry out a special crackdown for eight months from March to October. The Korean National Police Agency will form a "TF to eradicate livelihood and price disruption crimes," headed by the investigation bureau chief at headquarters, and investigate livelihood and price disruption crimes, including third-party improper involvement in policy funds, focusing on direct investigative departments at provincial governments and intelligence teams at police stations.
First Vice Minister No Yong-seok said, "We asked the Korean National Police Agency to strictly crack down on third-party improper involvement that causes damage to small and medium-sized businesses and small merchants," adding, "The Ministry of SMEs and Startups (MSS) and policy finance institutions will actively cooperate with the Korean National Police Agency's special crackdown."