[Exclusive] Prosecution Investigation Reveals NongHyup Federation's Intervention in NongHyup Bank Personnel Decisions

Indictment Obtained in Connection with 15 Billion Won Improper Loan to Seoyoung Holdings
"Vice President Ji Joonseop Intervened in Bank Personnel Decisions Under the Pretext of 'Special Consultations'"
Accused of Replacing Bank HR Head to 'Refle

Despite lacking direct authority over personnel decisions, the National Agricultural Cooperative Federation (NongHyup Central Cooperative) was found to have intervened in the appointments of affiliates such as NongHyup Bank by leveraging its governance structure, according to a prosecution investigation. Ji Joonseop, Vice President of the National Agricultural Cooperative Federation, who was indicted in connection with this case, reportedly exerted influence by replacing the head of the bank's HR department under the pretext of smoothly reflecting the federation's opinions. According to prosecutors, some personnel requests were accepted, resulting in actual changes to the personnel plans. Vice President Ji is also accused of attempting to destroy evidence by instructing his secretary to damage his mobile phone after the investigation began.

According to the indictment of Vice President Ji submitted by the Ministry of Justice to Assemblyman Kim Jaeseop of the People Power Party on the 13th, prosecutors indicted Ji without detention last October on charges of obstruction of business, incitement to destroy evidence, and incitement to conceal evidence. Despite having no authority over personnel decisions at NongHyup Bank, Ji is accused of abusing his position to pressure the bank to appoint a specific individual as head of the loan review department, thereby altering the bank’s personnel plan.

Prosecutors: "Senior Executives Including the President Intervened in NongHyup Bank Personnel Decisions Under the Pretext of 'Special Consultations'"

Prosecutors pointed out that, due to NongHyup's governance structure, the National Agricultural Cooperative Federation can exercise substantial influence over personnel matters at affiliates under NongHyup Financial Group. They stated that senior executives, including the president of the federation, have intervened in personnel decisions. The federation owns 100% of NongHyup Financial Group, which in turn wholly owns subsidiaries such as NongHyup Bank. Prosecutors stated, "The National Agricultural Cooperative Federation exercises significant influence over NongHyup Bank’s personnel matters through its practical involvement in appointing the bank’s president, its authority to guide and supervise subsidiary operations, and its personnel exchange system."

According to prosecutors, senior executives such as the president or vice president would classify candidates for affiliate appointments with whom they had personal connections or who were the subject of internal or external personnel requests as "special consultation" cases. They would then relay the preferred departments of these candidates to the federation’s HR team, which had no formal authority over affiliate personnel decisions. The HR team would compile and organize these "special consultation" cases, forward them to the relevant affiliate's HR department, and demand that they be reflected in the personnel planning process. If not reflected, they would request further consideration.

"Vice President Ji Joonseop Ordered Replacement of Bank HR Head to Reflect Federation’s Opinions"

Vice President Ji was found to have ordered the replacement of the bank’s HR head to ensure the federation’s personnel opinions were reflected. Prosecutors found that, ahead of NongHyup Bank’s regular personnel reshuffle in 2025, Ji decided to replace the HR head who had been appointed during the tenure of former federation president Lee Seonghee, in order to better reflect the federation’s views. Prosecutors stated, "(Vice President Ji) conveyed to former NongHyup Bank president Lee Seokyong that replacing the HR head was President Kang Hodong’s opinion, and former president Lee replaced the HR head with the person requested by the defendant." In the indictment, the bank's HR team testified, "Vice President Ji replaced the HR head to appoint his close associate, and during this process, the bank president played no role."

Ji is also accused of instructing the federation’s HR team and others to reflect personnel requests he received in actual bank appointments. He received such a request from Han Sangkwon, chairman of Seoyoung Holdings, who was also on trial for obtaining improper loans from NongHyup Bank by abusing his position as a local media owner. The request concerned Mr. A, then head of the corporate restructuring department at NongHyup Bank, who had overseen the relevant loan review.

According to prosecutors, in March 2024, Chairman Han, who had graduated from the same middle school as Vice President Ji but had no prior relationship, contacted Ji, claiming to have received information about President Kang Hodong’s misconduct and was preventing it from being published. Ji reportedly decided to maintain a relationship with Han, fearing the information might become public. Subsequently, Han, seeking favorable treatment such as an extension of the improper loan, flaunted his connection to Ji by attending several golf outings with Mr. A and bank vice presidents.

Prosecutors stated in the indictment that when Mr. A expressed a desire to transfer to the CIB review department, Chairman Han made a personnel request to Vice President Ji. In November 2024, Ji handed a note with Mr. A’s name and desired position (CIB review department head) to the federation’s HR team leader, instructing that it be forwarded to the bank’s HR team as a "special consultation" case.

At the time, the bank’s HR team, following the regular personnel policy of "transferring department heads only after at least two years of service," had prepared a personnel plan excluding Mr. A’s transfer, as he had only served one year in his current department, and had already obtained approval from the former bank president. However, upon being briefed, Vice President Ji demanded that the "special consultation" be reflected, prompting the bank’s HR team to revise the plan to include Mr. A as the second candidate for the CIB review department head position. Ji then instructed further adjustments through the federation’s HR team, and ultimately, the bank’s HR team leader made the requested changes to the personnel plan.

Kim Jaeseop, a member of the People Power Party, is giving an interview to The Asia Business Daily at the National Assembly on the 12th. Photo by Kim Hyunmin kimhyun81@

Also Accused of Instructing Secretary to Replace and Destroy Mobile Phone

Vice President Ji is also accused of instructing his secretary to replace and dispose of his mobile phone out of concern that the investigation into Chairman Han could expand to himself. The secretary reportedly kept Ji’s mobile phone, smashed it with a hammer, poured water on it, and threw it in the trash. Ji is also accused of inciting evidence concealment by instructing the secretary to provide false information about the phone’s disposal location during a prosecution inquiry.

The Seoul Central District Prosecutors’ Office’s Anti-Corruption Investigation Division 1 indicted Chairman Han and three executives without detention last October on charges of fraud and embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes, and indicted Vice President Ji on charges including obstruction of business. The Seoul Central District Court’s Criminal Division 35 held a preliminary hearing on December 18 and is scheduled to hold a second preliminary hearing on March 5.

Assemblyman Kim Jaeseop stated, "This case is not simply a matter of individual misconduct, but reveals a structural problem in which the federation was able to exert influence over affiliate personnel decisions through unofficial channels such as 'special consultations.' In a governance structure where authority and responsibility for personnel decisions are not separated, internal controls are unlikely to function properly." He emphasized, "It is necessary to review and overhaul the entire governance structure to clarify the independence and accountability of personnel decisions at NongHyup Financial Group affiliates."