Tensions Rise in Retail Sector Ahead of National Assembly Audit

As the National Assembly's audit approaches in just over a week, the retail and food sectors are on high alert. Key issues such as Homeplus's corporate rehabilitation, collusion in food raw materials, and a personal data breach at Coupang are set to be addressed, prompting the industry to prepare for the audit.

According to the National Assembly and industry sources on September 29, 17 standing committees will conduct audits from October 6 to 27, targeting around 800 institutions. In the retail and food sectors, the Committee on Trade, Industry, Energy, Small and Medium Enterprises, and the Committee on Agriculture, Food, Rural Affairs, Oceans and Fisheries, along with the Committee on Science, Technology, Information, Broadcasting, and Communications, have selected key corporate officials as witnesses.

The Homeplus situation will be discussed in the Trade Committee. On October 7, Kim Byung-joo, chairman of MBK Partners, has been chosen as a witness for the audit by the Ministry of SMEs and Startups. The main focus will be 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. If repayments begin as planned, the rehabilitation process can be concluded, but challenges remain, including asset sales, normalizing product supply, and repaying creditors.

In the food sector, collusion over raw materials is a key issue. The Agriculture and Fisheries Committee has selected 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 topic will be 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 focus 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 (CISO), 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 collecting personal data without legal grounds. 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 September 23. The Political Affairs Committee has yet to finalize its list of witnesses, so it remains to be seen if this issue will be addressed further.

An industry insider stated, “With significant issues at hand this year, there is considerable tension across the industry ahead of the audit. While it is necessary to hold companies accountable, it is essential that the discussions go beyond mere criticism to address the root causes and explore measures for prevention and institutional improvement.”