[Asia Economy Reporter Seulgina Jo] The Korea Communications Commission (KCC) will issue an administrative sanction against the comprehensive programming channel MBN (Maeil Broadcasting Network) on the afternoon of the 30th for violating the Broadcasting Act through capital fund manipulation. In the worst-case scenario, a decision to revoke approval could be made, causing the broadcasting industry to be on high alert.
The KCC will hold a plenary meeting that afternoon to decide on the administrative sanction against MBN. MBN is accused of having borrowed about 55 billion won under borrowed names and supplementing company funds to purchase company shares under the names of executives and employees to meet the minimum capital requirement of 300 billion won at the time of the comprehensive programming channel launch in 2011, and then concealing this through accounting fraud. In the first trial at the end of July, MBN’s management was found guilty, and the corporation was fined 200 million won.
KCC standing commissioners plan to hold an additional briefing session that morning before the plenary meeting to determine the level of administrative sanctions. According to the Broadcasting Act, if approval was obtained by "fraudulent or other improper means," administrative sanctions such as ▲revocation of approval ▲suspension of all or part of business within six months ▲advertisement suspension ▲shortening of approval validity period are possible. Currently, since the illegalities are clear, severe disciplinary actions ranging from suspension of business within six months to revocation of approval are being discussed. In particular, since MBN’s re-approval review is pending, sanctions such as shortening the approval validity period are considered ineffective.
The broadcasting industry is in a state of extreme tension. Since competition in the comprehensive programming channel market is fierce, even a business suspension card would cause significant damage. Even if MBN’s approval is revoked, it can maintain its broadcasting business for one year. However, it is also possible that MBN may file a lawsuit to contest the administrative sanction.
An industry insider said, "This is the first time a comprehensive programming channel is facing the possibility of approval revocation, so it will have repercussions in the broadcasting industry in any form," adding, "Even if it is a business suspension sanction, there are various options such as whether to suspend broadcasting transmission during the period or to suspend new broadcasts."
The KCC conducted a hearing procedure on the 12th targeting MBN co-CEOs Jang Seung-jun and Ryu Ho-gil, and on the 28th directly heard opinions from Jang Dae-hwan, chairman of the Maeil Business Newspaper Media Group. At that meeting, Chairman Jang admitted to paying capital using borrowed-name shareholders but said, "At the time of initial approval, I was unaware of the illegal acts." The KCC pointed out, "Chairman Jang lacked a responsible attitude by not dismissing the management who committed illegal acts and promoting CEO Jang to the representative of Maeil Business Newspaper," and CEO Jang immediately expressed his intention to resign.
Earlier, MBN also issued a public apology, stating, "We deeply reflect on the occurrence of such an incident at a broadcaster whose lifeblood is public interest and sincerely apologize to the public." The Citizens’ Coalition for Democratic Media and the Lawyers for a Democratic Society have urged the KCC to revoke approval, saying, "If approval is not revoked for malicious illegal acts, the Broadcasting Act will become a worthless law."
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