Board of Audit and Inspection releases findings on YTN stake sale
Stake size altered to block large conglomerates from bidding
Watchdog says move violated public institutions' decision-making autonomy
Investigative materials on Lee, Kang sent to Corruption Investigation Office
South Korea's Board of Audit and Inspection has found that Lee Dong-kwan, then chairman of the Korea Communications Commission, pressured the Ministry of Trade, Industry and Energy to restrict large conglomerates from bidding during the sale of YTN under the Yoon Suk Yeol administration.
In response, the board issued a caution to the relevant agencies and forwarded investigative reference materials on Lee and Kang Kyung-sung, then second vice minister of the Ministry of Trade, Industry and Energy, to the Corruption Investigation Office for High-ranking Officials.
The board announced the findings Monday as part of its audit on the management of public institution assets.
According to the audit results, the Ministry of Trade, Industry and Energy was the supervisory authority overseeing Korea Electric Power Data Network, known as KDN, under the Act on the Management of Public Institutions in 2022. At the time, KDN and the Korea Racing Authority were in the process of selling their YTN stakes as part of a public institution reform plan.
The two institutions, after consulting with the lead underwriter for the sale, had devised a plan to jointly sell 29.99 percent of YTN — all but roughly 400,000 shares of the combined 13 million shares, or 30.95 percent, held by KDN (9 million shares) and the Korea Racing Authority (4 million shares).
The rationale was that keeping the stake just below the 30 percent threshold set by the Broadcasting Act — which bars large conglomerates from owning 30 percent or more of a broadcaster — would attract major corporate bidders and fetch a higher price.
That plan changed in September of that year, however, after Kang received a demand from Lee to sell the entire YTN stake.
According to the board, Kang summoned officials from KDN, the Korea Racing Authority and the lead underwriter the following day and directed them to sell all shares held by both institutions simultaneously.
Lee also instructed his ministry's working-level staff that same day — without any internal deliberation at the Korea Communications Commission — to send official letters to the Ministry of Trade, Industry and Energy and the Ministry of Agriculture, Food and Rural Affairs stating that it would be "desirable to consolidate and sell all shares."
KDN and the Korea Racing Authority ultimately revised their joint sale agreement and reissued the tender to cover all 13 million YTN shares, departing from the original agreement and the underwriter's recommendation. Only three companies submitted final bids, and YTN was sold to Yujin Group.
The board determined that the Ministry of Trade, Industry and Energy and the Korea Communications Commission had improperly pressured KDN and the Korea Racing Authority to alter a legitimately concluded joint sale agreement, thereby violating the decision-making autonomy of the public institutions.
However, the board said it could not determine whether the sale price was unduly low, noting that while large conglomerates' participation might have added a control premium and driven up the price, the exact amount could not be calculated with certainty.
sang@heraldcorp.com
