President: "Not true" vs. Employees: "Funds siphoned off through fake transactions"
Audit team uncovered issue last year but kept silent... Accusations of cover-up and protection
An allegation that tens of millions of won have gone missing from a 100 million won subsidy at a local Nonghyup branch in Wando County, South Jeolla Province, is rapidly spreading and causing a major stir.
According to Wando Nonghyup and related sources on June 9, an internal audit recently uncovered that 57 million won from the “island ferry operation fund”?which amounts to about 128 million won, or 3.2% of the 4 billion won principal deposited by the local Nonghyup branch with the National Agricultural Cooperative Federation?had been used arbitrarily.
The “ferry operation fund” was established to support ferry fares for cooperative members living on islands such as Geumil, Geumdang, and Saengildo.
The Nonghyup audit team identified this issue during the 2024 financial audit. However, it was revealed that the matter was not reported at the “delegates’ general meeting” held in February this year. Regarding this, a member of the audit team explained, “We omitted a separate report because the cooperative president promised to voluntarily restore the full amount in question.”
However, additional suspicions have been raised within Nonghyup regarding possible embezzlement by President A, and further fallout is anticipated.
An anonymous Nonghyup employee claimed, “President A obtained a fake business registration certificate under an acquaintance’s name, opened a fraudulent bank account, transferred the ferry operation funds to that account, withdrew the money in cash, and used it for personal expenses.”
The employee added, “The president manipulated documents using people he was personally close to and siphoned off funds through fake transactions. As a result, both employees and cooperative members are now bearing the consequences.”
The employee further claimed, “One of the auditors at the time was President A’s maternal cousin, and another auditor, B, overlooked the issue quietly after receiving a promise from President A not to run for a third term, as B was considering running for president himself.”
In response, Nonghyup stated, “Of the 57 million won identified in the audit, the actual ferry operation fund was about 42 million won. Of this, 22 million won was properly disbursed, and the problematic 20 million won was processed correctly in accounting by being provided as complimentary ride vouchers in April.” They added, “The staff member in charge misclassified the fund due to an error, and this employee has since been reassigned.”
President A countered, “Auditor B exaggerated the facts, making it seem as if I had embezzled 50 million won, which blew the issue out of proportion. I never received any rebates, nor did I commit embezzlement. I originally intended not to run for a third term, but due to this incident, I am reconsidering my candidacy.”
In contrast, Auditor B asserted, “It is clear that the operation fund was not used legitimately and was handled in an irregular manner. The real issue is that such a serious matter was concealed from the board rather than being reported.” He further pointed out, “No employee could spend such a large sum without the president’s knowledge.”
Auditor B also stated, “I never asked the president to give up running for a third term. After the incident broke, President A conveyed through his associates that he would not seek a third term, but that has nothing to do with my audit findings. Such a deal is simply unthinkable.”
Meanwhile, controversy is growing within Nonghyup over calls for a thorough investigation and accountability from the president regarding this incident. There is also speculation that a police investigation may follow, drawing significant attention to future developments.
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