Audit exposes waste, favoritism at NongHyup

Jan 09, 2026, 08:15 am

A government audit has uncovered widespread irregularities and lax financial controls at National Agricultural Cooperative Federation (NongHyup), including excessive overseas travel spending by its chairman and lenient disciplinary actions that shielded insiders.

The Ministry of Agriculture Food and Rural Affairs (MAFRA) announced the interim findings of a special audit on Thursday, citing 65 confirmed cases of misconduct across NongHyup’s headquarters and its affiliated foundation. The probe found that internal control bodies failed to function properly and that serious offenses—such as sexual harassment and breach of duty—were met with mild penalties.

According to the audit, NongHyup exceeded lodging caps during overseas trips taken by Chairman Kang Ho-dong, without providing clear justification. While the approved nightly cap for the chairman is set at $250, expenses reached up to about 1.86 million won per night. Across five overseas trips, excess lodging costs totaled more than 40 million won.

The audit also found that details of the chairman’s discretionary spending were not disclosed, despite legal obligations under Korea’s information disclosure law. NongHyup said the card was assigned to the secretariat, but auditors concluded this did not exempt the organization from disclosure requirements.

MAFRA further criticized NongHyup’s internal disciplinary system. The Cooperative Audit Committee was found to have passively operated its disciplinary review process, issuing light reprimands even in cases warranting severe punishment. In addition, among 21 disciplinary cases since 2022, six involving suspected criminal conduct were not referred for prosecution, with no personnel committee convened to decide on filing complaints.

The special audit, conducted from Nov. 24 to Dec. 19, deployed 26 external experts and government officials—more than five times the manpower used in previous routine inspections. An anonymous whistleblowing channel also received 651 tips by the end of last year.

Yoon Jong-hoon, a certified public accountant who served as an external audit member, said NongHyup’s systems lag behind its scale. “NongHyup ranks among the top 10 conglomerates by size, yet its systems and professional staffing are far behind those of private companies,” he said. “While everyone else navigates with mobile apps, NongHyup feels like it’s using a paper map.”

MAFRA has already referred two cases to investigators, including allegations that NongHyup paid legal fees for employees involved in criminal cases and a breach-of-duty suspicion involving the NongHyup Foundation. Auditors will continue reviewing 38 additional cases requiring further verification.

The ministry plans to establish a task force this month—bringing together agricultural stakeholders and external experts—to draft institutional reforms. A joint government audit framework involving the Prime Minister’s Office, the Financial Services Commission, and the Financial Supervisory Service is also set to be launched.

Vice Minister Kim Jong-gu acknowledged criticism that the ministry had previously been too passive in overseeing NongHyup. “We take responsibility for that,” he said. “This audit will be a turning point to pursue fundamental reforms so NongHyup can fulfill its intended role.”

Meanwhile, Chairman Kang Ho-dong and Vice Chairman Ji Jun-seop declined requests for in-person questioning by the ministry in connection with the audit.

#NongHyup #National Agricultural Cooperative Federation #Ministry of Agriculture Food and Rural Affairs