KOMCA Spends 100 Million Won on Golf Courses and Dermatology Clinics with Corporate Card... MCST Orders Corrective Measures

Operational Audit of Copyright Trust Management Organizations
Conflicts of Interest and Improper Budget Execution Identified
"Pursuing Amendments to the Copyright Act Enforcement Decree"

The building of the Korea Music Copyright Association. Korea Music Copyright Association

The Ministry of Culture, Sports and Tourism (MCST) announced on June 3 that it had identified issues such as conflicts of interest, improper budget execution, and poor organizational management during its 2024 operational inspection of three copyright trust management organizations. The Ministry has ordered corrective measures. The organizations inspected were the Korea Music Copyright Association (KOMCA), the Together Music Copyright Association (HMC), and the Korea Music Industry Association (KMIA).

The most serious misconduct was uncovered at KOMCA, which collects 436.5 billion won annually. Executive A and Executive B of KOMCA selected their former and current affiliated companies as service providers for KOMCA events between 2022 and 2024, paying them 39 million won. They also paid or received a total of 96 million won in appearance fees and sponsorships to themselves and artists affiliated with their companies. In total, 135 million won was spent from the association’s accounts for these purposes.

Executive B participated as an evaluation committee member in the selection process for KOMCA’s advertising production and broadcasting company, yet did not avoid having his own song used in the advertisement. KOMCA paid a total of 60 million won in copyright usage fees for this advertisement in two separate payments.

KOMCA also created a new "self-development expenses" category worth 700 million won in 2024 without approval from the general meeting or board of directors. From 2023 onward, executives and employees inappropriately spent a total of 115 million won using corporate cards at gyms, dermatology clinics, massage parlors, golf practice ranges, and liquor stores. In particular, Executive A alone spent approximately 10 million won at gyms and dermatology clinics in 2024.

The inspection also found evidence of legal violations and abuse of private contracts in facility construction, suggesting favoritism in awarding contracts. KOMCA signed 11 construction contracts worth a total of 2.2 billion won with companies that had no track record or licenses. The association also failed to replace five committee members appointed in 2017 for eight years, in violation of regulations. Since 2018, KOMCA has not complied with the MCST’s order to expand regular membership. Cases that could undermine the neutrality and fairness of elections were also found.

HMC failed to announce resolutions of the general meeting and board of directors within the period stipulated in its articles of association, or made incorrect announcements. In the hiring process, the association arbitrarily established procedures without separate regulations, resulting in non-transparent recruitment practices.

KMIA paid an executive’s overseas travel expenses of 3 million won after the deadline specified in its regulations. The association also failed to verify applicants’ work experience during hiring, and appointed only internal members as document and interview screening committee members, indicating poor management. There was also a case where a board resolution was processed in writing, violating the articles of association.

Based on the findings of this inspection, the MCST plans to impose corrective orders on each organization and thoroughly monitor compliance. In particular, the Ministry is pursuing revisions to the Enforcement Decree of the Copyright Act to ensure democratic and transparent management of trust management organizations, including measures to strengthen the obligation to disclose executive compensation and allowances. Following KOMCA and the Korea Music Performers Association, the designation of HMC and KMIA as public interest-related organizations is also being pursued.

An MCST official stated, "This inspection was conducted to protect the rights and interests of creators and to ensure the reliability of trust management organizations," adding, "We plan to strictly respond to improper conduct by improving laws and systems."