NH chairman steps down from key posts as top executives resign amid management scandal

 Kang Ho-dong, chairman of the National Agricultural Cooperative Federation. (Yonhap)
SEOUL, January 13 (AJP) - The chief of South Korea's state-invested financial group NH stepped down from key posts following mass resignation of C-suite over corruption allegations. 

Kang Ho-dong, chairman of National Agricultural Cooperative Federation (NH), on Tuesday announced his resignation from concurrent leadership positions at a major farming daily and a charitable foundation, following a government audit that uncovered widespread management malpractice.

The move comes as half of the group’s top executive board members stepped down in a sweeping organizational overhaul aimed at addressing public outcry over excessive perks and lack of transparency.

During a public apology at the NH headquarters in Seoul, Kang expressed deep regret over the findings of a special audit by the Ministry of Agriculture, Food and Rural Affairs. 

"I heavily recognize the stern rebukes from the public and farmers following the ministry's announcement on Jan. 8," Kang said, pledging to relinquish his roles as chairman of the Nongmin Shinmun and head of the NongHyup Foundation to clearly define the boundaries of the group chairman's authority. 

The leadership shakeup will see the departure of half of NH’s representative-level executives, including the vice president, the head of mutual finance, and the president of the Nongmin Shinmun. Kang stated that he would delegate general management and personnel matters to business-specific CEOs, focusing his efforts on the core mission of advancing agriculture and rural development. 

Addressing specific allegations of power abuse, Kang apologized for exceeding the $250 daily limit for hotel expenses during overseas business trips and promised to return the overspent funds in full.

The ministry’s audit earlier revealed that Kang had exceeded accommodation price caps during all five of his international trips and received more than 300 million won ($206,000) in additional annual salary by concurrently serving as the head of the farming newspaper. 

To accelerate structural changes, NH will establish a "NongHyup Reform Committee" composed of experts from the legal, academic, and agricultural sectors. The committee is tasked with overhauling the chairman election process and governance structures while collaborating with the government’s own reform task force to ensure greater transparency in cooperative management. 

The fallout from the audit has also intensified legal risks for the group. The Seoul Metropolitan Police Agency’s financial crime unit is currently investigating allegations that NH used public funds to pay for employees' private legal fees and probing potential breach of trust within the NongHyup Foundation. The Ministry of Agriculture plans to finalize its audit results by March after reviewing 65 confirmed cases of malpractice and evaluating further legal action for 38 additional cases.

As of 2024, the unlisted NH commands a formidable presence in the financial landscape with total assets reaching 711 trillion won ($487 billion), a figure that solidifies its position as the fourth-largest financial group in South Korea - comprising 532 trillion won from its financial holding arm, 166 trillion won from the federation, and 13 trillion won from its economic business wing.

NH also stands as one of top three cooperative titan on a global scale alongside Japan’s Zen-Noh and the U.S.’ Cenex Harvest States (CHS).
Kim Yeon-jae Reporter duswogmlwo77@ajupress.com