Bowing Kang Hodong, President of the National Agricultural Cooperative Federation, Announces Resignation as Chairman of the Nongmin Newspaper

Public Apology by National Agricultural Cooperative Federation at Headquarters
Five Days After Announcement of Special Audit Interim Results
"Luxury Business Trip Expenses Will Be Reimbursed Personally"
Nonghyup Reform Committee to Be Led by Exte

Kang Hodong, Chairman of the National Agricultural Cooperative Federation, announced on January 13 that he would step down from his concurrent position as Chairman of Nongmin Shinmun. This comes five days after the government publicly disclosed various allegations of misconduct involving Chairman Kang and the National Agricultural Cooperative Federation through the announcement of the 'Interim Results of the Special Audit.'

On this day, Chairman Kang delivered a public apology at the headquarters of the National Agricultural Cooperative Federation regarding the interim results of the special audit by the Ministry of Agriculture, Food and Rural Affairs.

Kang Hodong, Chairman of the National Agricultural Cooperative Federation, is delivering a public apology regarding the 'Interim Results of the Special Audit by the Ministry of Agriculture, Food and Rural Affairs' at the Federation's headquarters on the 13th. Photo by Joo Sangdon

Chairman Kang stated, "Since the announcement of the interim results of the special audit, I have been acutely aware of the grave criticism from the public and farmers. I sincerely apologize for not meeting your expectations and for causing concern, and I take full responsibility for this," bowing his head in apology.

On January 8, the Ministry of Agriculture, Food and Rural Affairs referred two cases of personal misconduct to the authorities for investigation in its interim results of the special audit of the National Agricultural Cooperative Federation and the Nonghyup Foundation. In addition, 65 cases were identified, including inadequate internal controls, lenient disciplinary actions for executives and employees, and improper fund management. In particular, it was found that Chairman Kang had repeatedly misused public funds, such as staying at hotels costing over 2.22 million won per night during overseas business trips without special reasons.

Chairman Kang pledged to treat the current situation not merely as a crisis to be managed, but as a starting point for reaffirming the purpose and role of the federation. He promised to clarify the authority and responsibilities of the chairman and to implement personnel reforms. As a first step, he said he would resign from his positions as Chairman of Nongmin Shinmun and Chairman of the Nonghyup Foundation. He stated, "I will resign from the positions of Chairman of Nongmin Shinmun and Chairman of the Nonghyup Foundation, which have traditionally been held concurrently by the federation chairman. In light of the current situation, I take full responsibility, and the Executive Vice President (Vice Chairman of the Federation), the CEO of Mutual Finance, and the President of Nongmin Shinmun have also expressed their intention to resign."

While serving concurrently as Chairman of the National Agricultural Cooperative Federation and Chairman of Nongmin Shinmun, Chairman Kang received an annual salary of 390 million won from the federation and over 300 million won from Nongmin Shinmun. By stepping down from his position at Nongmin Shinmun, he will forgo an annual salary exceeding 300 million won and a severance payment of approximately 420 million won. The position at the Nonghyup Foundation is unpaid.

The luxury hotel expenses for overseas business trips, which were pointed out in the special audit, will be reimbursed by Chairman Kang personally. He had stayed at luxury hotels costing more than 2.22 million won per night during overseas trips, which is six times the regulation limit of 250 dollars (approximately 360,000 won) per night. Chairman Kang said, "Regardless of the circumstances, I deeply regret that accommodation expenses exceeding the daily limit of 250 dollars were incurred during overseas business trips. I will fully reimburse all related expenses, and I will comprehensively revise the relevant systems and procedures to prevent such controversies from recurring in the future."

Chairman Kang also promised to reduce the authority of the chairman and implement institutional reforms. He said, "I will delegate overall management, including personnel matters, to the CEOs in charge of each business division, and focus on my primary duties of advancing agriculture, rural communities, and the rights of farmers. For all the issues raised this time, I will proactively address any shortcomings and make necessary institutional improvements."

To address structural issues throughout the organization, the federation plans to establish a 'Nonghyup Reform Committee.' The committee will focus on identifying and addressing improvement tasks related to long-standing structural issues, such as the method of electing the federation chairman, governance structure, and the executive election system for cooperative heads and other executives, which have been repeatedly raised by external stakeholders. The committee will also develop reform measures to enhance transparency in cooperative management. The Nonghyup Reform Committee will be chaired by an external expert and composed of professionals from the legal, academic, agricultural, and civil society sectors. Its mandate is to thoroughly address not only the issues identified in the audit but also the unreasonable practices that have been tolerated under the guise of tradition.

Chairman Kang stated, "For the past 65 years, the federation has done its utmost for agriculture, rural communities, and farmers, but I once again deeply apologize for falling short of public expectations. Going forward, we will devote ourselves to our fundamental role of supporting agriculture, rural communities, and farmers' livelihoods, and strive to regain public trust and become a beloved cooperative."