Tensions Rise in Retail Sector Ahead of National Assembly Audit

As the National Assembly's audit approaches, the retail and food sectors are on high alert. Key issues such as Homeplus's corporate rehabilitation, collusion in food raw materials, and Coupang's personal data breach are set to be addressed during the audit.

According to reports from the National Assembly and industry sources, 17 standing committees will conduct audits from October 6 to 27, targeting around 800 institutions. In the retail and food sectors, key corporate representatives have been summoned as witnesses by the Committee on Trade, Industry, Energy, and Small and Medium Enterprises, the Committee on Agriculture, Food, Rural Affairs, Oceans and Fisheries, and the Committee on Science, Technology, Information, Broadcasting and Communications.

The Homeplus situation will be discussed in the Trade Committee. On October 7, Kim Byung-joo, chairman of MBK Partners, has been selected as a witness for the audit by the Ministry of SMEs and Startups. Key questions will focus on the damages suffered by merchants during Homeplus's rehabilitation process and the responsibilities of the major shareholders. Homeplus received approval for its rehabilitation plan from the Seoul Bankruptcy Court on October 2, with 100% of secured creditors and 75.9% of rehabilitation creditors voting in favor. While the plan's implementation could conclude the rehabilitation process, challenges remain, including asset sales, normalizing product supply, and repaying creditors.

In the food sector, collusion over raw materials is a central issue. The Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee has summoned Jo Young-sik, vice president of CJ CheilJedang; Lee Woon-ik, CEO of Samyang Corporation; and Park Yoon-ki, CEO of Lotte Chilsung Beverage as witnesses for the audit on October 7. The main focus will be on inquiries related to unfair trading practices, including collusion. The Fair Trade Commission imposed a total fine of 408.3 billion won on CJ CheilJedang, Samyang Corporation, and Daehan Flour Mills for colluding on sugar prices this year, while seven flour companies and four starch and starch syrup companies faced fines of 671 billion won and 747.6 billion won, respectively. CJ CheilJedang and Samyang are involved in multiple cases, so the audit is likely to concentrate on the pricing process and measures to prevent recurrence.

Coupang's personal data breach incident will also be addressed during the audit. The Science and Technology Committee has selected Brett Anthony Mathis, Coupang's Chief Information Security Officer, as a witness. The Personal Information Protection Commission imposed a fine of 624.7 billion won and an additional penalty of 16.8 million won on Coupang in June for violating safety measures and unlawfully collecting personal data. Coupang is also facing scrutiny over fair trade issues. The company has resisted a Fair Trade Commission investigation into alleged violations of the Large-Scale Distribution Business Act, claiming it received no prior notice, but the Seoul High Court dismissed its request for a stay on October 23. The Political Affairs Committee has yet to finalize its list of witnesses, leaving the potential for further discussion on this matter.

An industry insider stated, “With significant issues at hand this year, there is a heightened sense of tension across the industry ahead of the audit. While it is necessary to hold companies accountable, the discussions should not be limited to criticism as in previous years; instead, they should address the root causes of the problems and explore measures for prevention and institutional improvement.”