Talks on a merger between the Korea SMEs & Startups Distribution & Marketing Agency and Gongyoung Home Shopping are underway behind the scenes. If merged, Gongyoung Home Shopping would fall within the audit scope of the Board of Audit and Inspection, strengthening oversight and supervision. Some say the merger will not be easy and raise concerns about job insecurity.
According to ChosunBiz reporting compiled on the 25th, the labor union of Gongyoung Home Shopping recently met with Jang Cheol-min, a lawmaker of the Democratic Party of Korea who is a secretary on the Trade. Industry Energy. SMEs. and Startups Committee, to discuss the merger with the Korea SMEs & Startups Distribution & Marketing Agency.
The union said on its members' bulletin board, "We were told that discussions within the Ministry of SMEs and Startups on the possibility of merging the Korea SMEs & Startups Distribution & Marketing Agency and Gongyoung Home Shopping are proceeding at a considerable level," and added, "We will check how the employment and working conditions of members will be protected, and, if necessary, will meet with the minister and vice minister of the Ministry of SMEs and Startups (MSS)."
The merger 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 merger to strengthen oversight of Gongyoung Home Shopping, and the Ministry of Strategy and Finance is expected to present a plan. Whether the Korea SMEs & Startups Distribution & Marketing Agency will absorb Gongyoung Home Shopping or establish a separate merged corporation is expected to be decided after discussions. The makeup of shareholders and the direction of employment succession after the merger are also expected to take shape after a government announcement.
The backdrop to the merger talks reflects a judgment to close oversight blind spots for Gongyoung Home Shopping. The Korea SMEs & Startups Distribution & Marketing Agency is an agency under the Ministry of SMEs and Startups (MSS) whose 100% equity is held by the Korea SMEs and Startups Agency (KOSME), making it easier to supervise.
But Gongyoung Home Shopping is different. It is operated as a separate corporation, so even the largest shareholder, the Korea SMEs & Startups Distribution & Marketing Agency, faces limits in directly examining Gongyoung Home Shopping's overall operations and accounting. In particular, as an "other public institution," it is not included among entities whose overall operations and accounting can be audited by the Board of Audit and Inspection like public enterprises or quasi-governmental institutions. It is also not a corporation with capital contributed by the state or a local government, so it does not fall under mandatory accounting inspection under the Board of Audit and Inspection Act.
Last year, the Board of Audit and Inspection told the office of People Power Party lawmaker Kang Seung-gyu that "it is hard to view Gongyoung Home Shopping's accounting as a matter requiring inspection." However, it said accounting related to individual contracts concluded with entities specified by law could be inspected selectively.
Some observers say there will be no small number of hurdles before an actual merger. While a merger 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 organizations are overseen by different bodies.
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 consolidations.
If merger talks move into full swing, employment succession is expected to emerge as a key agenda item. The union at the Korea SMEs & Startups Distribution & Marketing Agency 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 the merger process, the two unions may respond jointly.
People Power Party lawmaker Kang Seung-gyu said, "At last year's parliamentary audit, large-scale failures were uncovered in the operation of the internal committee for product verification," adding, "We need a meticulous plan that can reduce confusion that may arise during various discussions to strengthen the transparency and accountability of public institutions."