[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 'Reflect Federation's Opinions'
Evidence Suggests Actual Changes to Bank Personnel Proposals Following Personnel Requests
Also Accused of Instructing Secretary to Destroy Mobile Phone and Conceal Evidence

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 human resources 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 proposals. Ji is also accused of destroying evidence, such as instructing his secretary to damage his mobile phone after the prosecution's investigation began.

According to the indictment 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, instigation of evidence destruction, and instigation of evidence concealment. Despite lacking authority over personnel matters 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 proposal.

Prosecution: "Senior Executives at the Federation, Including the President, Intervened in NongHyup Bank Personnel Decisions Under the Pretext of 'Special Consultations'"

Prosecutors pointed out that, due to the governance structure of NongHyup, the National Agricultural Cooperative Federation can exert 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 affairs. The federation owns 100% of NongHyup Financial Group, which in turn wholly owns subsidiaries such as NongHyup Bank. Prosecutors said, "The National Agricultural Cooperative Federation exercises substantial influence over personnel matters at NongHyup Bank through de facto involvement in appointing the bank’s president, the right to guide and supervise subsidiary operations, and personnel exchange systems."

According to prosecutors, senior executives such as the president or vice president categorized affiliate personnel who were either personally acquainted or recommended through internal or external requests as 'special consultation' candidates. They then conveyed the preferred departments of these candidates to the federation’s HR team, which has no official personnel authority over affiliates. The HR team compiled and organized the 'special consultation' requests and passed them on to the HR departments of the relevant affiliates, demanding that these preferences be reflected in the personnel proposal process. If not reflected, they would make repeated demands for inclusion.

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

Ji was found to have instructed the replacement of the bank's HR head to ensure the federation's personnel-related opinions were reflected. According to prosecutors, 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, "(Ji) conveyed to former NongHyup Bank president Lee Seokyong that replacing the HR head was the opinion of federation president Kang Hodong, and Lee replaced the HR head with the person requested by the defendant." The bank’s HR team testified in the indictment that "Vice President Ji replaced the HR head to appoint one of his close associates, and the bank president played no role in the process."

Ji is also accused of instructing the federation’s HR team and others to reflect personnel requests he received in actual appointments at NongHyup Bank. He received a personnel request from Han Sangkwon, chairman of Seoyoung Holdings, who was also indicted in the same case for receiving improper loans from NongHyup Bank by abusing his status as a local media owner. The request concerned Mr. A, then head of the Corporate Improvement Department at NongHyup Bank, who had been in charge of reviewing the loan in question.

According to prosecutors, in March 2024, Han, who had graduated from the same middle school as Ji but had no prior contact, requested a meeting with Ji, claiming he had received information about wrongdoing by federation president Kang Hodong and was preventing it from being reported. Ji, fearing the possibility of this information becoming public, decided to maintain his relationship with Han. Subsequently, Han, seeking favors such as an extension of the improper loan, flaunted his relationship with Ji by attending multiple 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, Han made a personnel request to Ji. In November 2024, Ji handed a memo with Mr. A’s name and desired position as CIB Review Department head to the federation’s HR team leader, instructing that it be forwarded to NongHyup Bank’s HR team as a 'special consultation.'

At that time, according to the bank’s regular personnel policy, the principle was to transfer department heads to other departments only after serving at least two years in their current post. Since Mr. A had served only one year, the HR team prepared a personnel proposal excluding his transfer and obtained approval from the bank president. However, upon receiving this report, Ji demanded that the 'special consultation' be reflected, and the HR team revised the proposal to include Mr. A as the second candidate for CIB Review Department head. Ji then instructed additional adjustments through the federation’s HR team, and ultimately, the bank’s HR team leader incorporated these changes into the final personnel proposal.

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

Ji is also accused of instructing his secretary to replace and dispose of his mobile phone out of concern that the investigation into Han could expand to implicate himself. The secretary reportedly kept Ji’s phone, smashed it with a hammer, poured water over it, and discarded it in the trash. Ji is also charged with instructing the secretary to give false testimony to prosecutors about the phone’s location, thereby instigating evidence concealment.

The first anti-corruption division of the Seoul Central District Prosecutors’ Office indicted 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 Ji on charges including obstruction of business. The 35th Criminal Division of the Seoul Central District Court 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 merely an individual’s deviation, but reveals a structural problem in which the federation could exert influence over affiliate personnel matters through unofficial channels such as 'special consultations.' In a governance structure where authority and responsibility for personnel decisions are not separated, internal controls cannot function properly." He emphasized, "It is necessary to review and overhaul the overall governance structure to clarify the independence and accountability of personnel decisions at NongHyup’s financial affiliates."