Talks on integrating the Korea SMEs & Startups Distribution & Marketing Agency and Gongyoung Home Shopping are taking place behind the scenes. If the integration goes through, Gongyoung Home Shopping is expected to fall within the Board of Audit and Inspection's audit scope, strengthening oversight. Some say the integration will be difficult and are voicing concerns about job insecurity.
According to ChosunBiz reporting compiled on the 25th, the labor union of Gongyoung Home Shopping recently met Democratic Party of Korea lawmaker Jang Cheol-min, a floor leader of the Trade. Industry Energy. SMEs. and Startups Committee, to discuss integration with the Korea SMEs & Startups Distribution & Marketing Agency.
The union posted on its members' board, "We were told that internal discussions at the Ministry of SMEs and Startups on the possibility of integrating the Korea SMEs & Startups Distribution & Marketing Agency and Gongyoung Home Shopping have advanced considerably," adding, "We will verify how employees' jobs and working conditions will be protected, and, if necessary, meet with the minister and vice minister of the Ministry of SMEs and Startups (MSS)."
The integration of the Korea SMEs & Startups Distribution & Marketing Agency and Gongyoung Home Shopping has not been formalized. The Ministry of SMEs and Startups (MSS) is currently leading the integration to strengthen oversight of Gongyoung Home Shopping, and the Ministry of Economy and Finance is reportedly set to present a plan. Whether the Korea SMEs & Startups Distribution & Marketing Agency will absorb Gongyoung Home Shopping or establish a separate integrated entity is expected to be decided after discussions. The makeup of shareholders after the integration and the direction of employment succession are also likely to take shape after the government's announcement.
Behind the integration talks lies a judgment to eliminate blind spots in oversight of Gongyoung Home Shopping. The Korea SMEs & Startups Distribution & Marketing Agency is an affiliate of the Ministry of SMEs and Startups (MSS) with 100% equity held by the Korea SMEs and Startups Agency (KOSME), making it easier to oversee.
Gongyoung Home Shopping, however, is different. It operates as a separate corporation, so even the Korea SMEs & Startups Distribution & Marketing Agency, its largest shareholder, faces limits in directly scrutinizing Gongyoung Home Shopping's operations and accounting as a whole. In particular, as an "other public institution," it is not included among the entities that the Board of Audit and Inspection can audit for overall operations and accounting like public corporations and quasi-government institutions. It is also not a corporation with capital contributed by the state or a local government, so it does not fall under the mandatory accounting inspection subjects under the Board of Audit and Inspection Act.
Last year, the Board of Audit and Inspection replied to the office of People Power Party lawmaker Kang Seung-gyu that it was "hard to view Gongyoung Home Shopping's accounting as a necessary inspection matter." However, it said the accounting related to individual contracts concluded with entities specified by law could be selectively inspected.
Some observers say there will be no small number of hurdles before any actual integration. While integration could strengthen oversight of Gongyoung Home Shopping and eliminate duplication in functions that support sales channels for small and midsize businesses and small merchants, the two entities are overseen by different authorities.
The Korea SMEs & Startups Distribution & Marketing Agency is managed by the Ministry of SMEs and Startups (MSS), while Gongyoung Home Shopping, though under the MSS, is also a home shopping operator subject to approval and regulation by the Korea Communications Standards Commission. Analysts say the consultations and procedures required could be more complex than for other public-institution mergers and closures.
If integration talks gain momentum, employment succession is expected to emerge as a key agenda item. The Korea SMEs & Startups Distribution & Marketing Agency union is affiliated with the Korean Confederation of Trade Unions, while the Gongyoung Home Shopping union is affiliated with the Federation of Korean Trade Unions. If conflicts arise over employment or working conditions during integration, there is also talk that the two unions could mount a joint response.
People Power Party lawmaker Kang Seung-gyu said, "At last year's National Assembly audit, widespread failures were uncovered in the operation of the internal committee for product verification," adding, "A precise plan is needed to reduce confusion that may arise during various discussions to strengthen the transparency and accountability of public institutions."