South Korea officials referred to investigators over YTN sale interference

South Korea’s Board of Audit and Inspection (BAI) has referred former Korea Communications Commission Chairman Lee Dong-kwan and former Vice Minister of Industry Kang Kyung-sung to the Corruption Investigation Office for High-ranking Officials (CIO) following an investigation into the sale of YTN shares.

The BAI found that during the sale process in 2022, Lee pressured the Ministry of Trade, Industry and Energy to change the sale structure. Originally, the state-owned entities KDN and the Korea Racing Authority had planned to sell only 29.99% of their combined YTN stakes to ensure large corporations could participate without violating the 30% ownership limit set by the Broadcasting Act. This strategy was intended to attract more bidders and potentially secure a higher sale price through a management premium.

However, the BAI reported that Lee instructed the Ministry of Industry to demand a full sale of all shares, a move that was subsequently implemented by Kang. This intervention led to a revised agreement that excluded large corporations from the bidding process, resulting in only three participants. While the BAI noted that YTN was eventually sold to Eugene Group for 319.9 billion won—a price deemed not to be an undervalued sale—it concluded that the interference unlawfully infringed upon the decision-making autonomy of the public institutions involved.