The Korea Small and Medium Enterprises Distribution Center (Han Yu-won), a subsidiary of the Ministry of SMEs and Startups, is facing challenges in merging with Public Home Shopping, including salary disparities, equity adjustments, and broadcast approvals. Discussions on the merger are expected to intensify during the comprehensive audit of the Ministry of SMEs and Startups by the National Assembly's Industry, Trade, and Energy Committee on the 23rd.
The government announced on September 3 that it plans to merge the two institutions to establish the 'Small and Medium Enterprises Marketing Promotion Corporation' (tentative name). The Ministry of SMEs and Startups has stated that it will proceed with follow-up procedures, including gathering union opinions and amending relevant laws, but the specific method and timing of the merger remain undecided. Public Home Shopping has 379 employees, while Han Yu-won has 295.
Before the merger can take place, approval from the Public Institution Operating Committee, amendments to related laws, and consultations with labor unions are essential. The government has indicated that over 80% of the institutions targeted for consolidation require legal changes.
The most significant issue is the salary structure. According to this year's budget data from the Public Institution Management Information System (Alio), the average salary per person at Public Home Shopping is approximately 78.88 million won, while Han Yu-won's is 70.12 million won, resulting in a gap of 8.76 million won. While the base salary at Public Home Shopping is over 10 million won higher, starting salaries for new employees at Han Yu-won are about 7 million won higher. The government plans to ensure that employees, excluding executives, will have their employment status preserved and that their treatment will not decline.
Equity adjustments for Public Home Shopping also pose a challenge. Currently, Han Yu-won holds a 50% stake in Public Home Shopping, with the National Agricultural Cooperative Federation owning 45% and the National Federation of Fisheries Cooperatives holding 5%. Decisions regarding the surviving entity and the method of equity adjustment must be established first.
The broadcast approval process is another variable. Public Home Shopping launched in July 2015, and the Korea Communications Commission currently oversees home shopping approvals. If the merged entity wishes to continue operating the existing channel, it may need to reapply for approval, although the necessity and specific procedures have yet to be determined. The merger has also cast uncertainty over the remaining term of Lee Il-yong, the CEO of Public Home Shopping, who took office less than six months ago. His term is set to end in March 2029.
During the upcoming National Assembly audit on the 23rd, lawmakers are expected to question Minister of SMEs and Startups Lee So-young regarding these matters. There are calls for the Ministry to establish clear guidelines to ensure a smooth merger process.
A representative from the subsidiary stated, "To facilitate a smooth merger process between Han Yu-won and Public Home Shopping, we are currently conducting practical discussions to form a joint task force and advance detailed research projects. We plan to sequentially address the numerous challenges, including salary disparities and equity issues, in line with the Ministry's specific guidelines."
* This article has been translated by AI.
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