NH Nonghyup and local agricultural cooperatives faced pointed criticism at a parliamentary audit over weak internal controls. Questions were also raised over NH Nonghyup's budget drafting and execution process. NH Nonghyup Chairman Kang Ho-dong (강호동) denied allegations that he ordered, colluded in or aided a suspected purchase of high-priced souvenirs involving secretariat staff, and said he has no plan to step down as chairman.

At the Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee's morning audit of NH Nonghyup and related bodies on Oct. 16, lawmakers addressed disciplinary procedures for employee misconduct, internal control systems, the appropriateness of budget execution and Kang's stance on an investigation involving him.

The failure to report six suspected embezzlement and breach-of-trust cases and a case involving early retirement payouts

Joo Cheol-hyeon, a lawmaker from the Democratic Party, said NH Nonghyup rules require the organisation to file complaints when executives or employees commit crimes related to their duties. He said that of 21 employee cases in 2022, six with clear criminal suspicions were not reported to investigative authorities.

Joo said internal rules require NH to file complaints when executives or employees commit duty-related crimes. He said cases can be excluded only through review and a decision by the personnel committee, but some cases did not even follow that procedure.

Joo criticised NH for failing to follow even minimal internal procedures in cases with suspected crimes, including sexual misconduct and breach of trust.

The handling of an embezzlement case at a local agricultural cooperative was also raised as an issue.

Joo said that in 2023 a Hanaro Mart employee at a Geoje-area agricultural cooperative embezzled 130 million won, but the cooperative head handled the case as an honorary retirement without filing a complaint or taking disciplinary action and even paid 100 million won in honorary retirement money.

Joo said, "Doesn't this make no sense?" and urged NH to improve its internal control system.

He also said the NH Nonghyup personnel committee is made up only of internal staff and that the views of the department in charge pass in a formalistic manner, stressing the need for an independent control mechanism with external participation.

Kang agreed on the need for improvements. He said he had not fully grasped the specific details of individual cases and said he would thoroughly follow relevant procedures in the future.

Concerns that 60 percent of central body budget is not allocated, and controversy over diversion to publicity spending

Criticism also emerged over how NH Nonghyup drafts and executes its budget.

Yoon Jun-byeong, a Democratic Party lawmaker, said about 60 percent of NH Nonghyup's annual budget of about 800 billion won is run as unallocated funds.

Yoon said budgets should be executed through a resolution process according to predetermined purposes and items, but he argued that at NH Nonghyup a substantial amount may be operated at the discretion of the executive body.

He also raised concerns about the appropriateness of budget transfers.

Yoon said NH Nonghyup increased publicity-related spending without properly following budget transfer procedures. He pointed to 19.5 billion won in publicity-related budget cited over the three years from 2023 to 2025.

He criticised the unallocated budget as functioning as a large slush fund for the central body's executive leadership and as unofficial petty cash.

Yoon also cited an allegation that an NH Nonghyup executive spent 100 million won to block reports on alleged irregularities related to the chairman election that were raised in a joint government special audit, and said budget execution transparency must be strengthened.

Kang Ho-dong denies involvement in high-priced souvenir allegations, says he will take responsibility if legal liability arises

Kang's stance on an investigation involving the NH Nonghyup secretariat was also addressed.

Shin Jang-sik, a lawmaker from the Rebuilding Korea Party, mentioned 14 issues confirmed in a joint government special audit, including alleged misuse of public funds and unfair contracts, and asked whether Kang was involved in the high-priced souvenir purchase allegations.

Two secretariat staff members were previously arrested over souvenir purchases worth about 240 million won.

When Shin asked whether Kang ordered or colluded in or aided the souvenir purchases, Kang said he did not.

He also said he could not agree to stepping down as chairman to undergo an investigation.

Asked what he would do if the investigation later resulted in a situation where he must bear legal responsibility, he said, "I said I would take responsibility if a situation arises where I can be held legally responsible."