Data breaches, food price-fixing to face scrutiny at national audit

Science, industry and agriculture committees set witness lists

Tving CEO, Coupang CISO summoned over data leaks

CJ CheilJedang, Samyang among food firms called over collusion

Tving CEO Choi Joo-hee apologizes for a personal data breach at a hotel in Jung-gu, Seoul, on Sept. 3. [Yonhap]

Retail and food companies are bracing for scrutiny as this month's national audit approaches, with executives from major firms confirmed to appear as witnesses over sensitive issues including personal data breaches, food price-fixing and the Homeplus crisis.

According to industry sources Thursday, the National Assembly's Science and Technology Information Broadcasting and Communications Committee, the Industry, Trade, Resources, SMEs and Startups Committee, and the Agriculture, Food, Maritime Affairs and Fisheries Committee have recently approved their witness and reference lists for the national audit. The Political Affairs Committee, which oversees the Korea Fair Trade Commission, is still in final-stage negotiations between the ruling and opposition parties over its witness list. The rosters of all these standing committees include representatives from retail and food companies.

Tving, Coupang summoned over mass data breaches

Executives from companies that suffered large-scale personal data breaches are set to appear before the Science and Technology Information Broadcasting and Communications Committee's audit of the Ministry of Science and ICT on Tuesday. Tving CEO Choi Joo-hee has been named as a witness in connection with a May hacking incident that exposed about 39.54 million personal records. She is expected to face questions about the breach and customer compensation. CJ ENM CEO Yoon Sang-hyun was initially added to the witness list to address the parent company's responsibility in the Tving incident but was dropped at the last minute.

A personal data breach at Coupang that occurred last November will also come under renewed scrutiny. Chief Information Security Officer Brett Anthony will appear before the committee to answer questions about follow-up measures. Coupang may also be called before other committees after it refused an on-site investigation by the Korea Fair Trade Commission last month over alleged violations of the Large-Scale Distribution Business Act.

The Korea Communications Commission's audit on Oct. 12 is expected to take up questions about the effectiveness of the TV home shopping re-approval regime. GS Retail CEO Heo Seo-hong and Lotte Home Shopping CEO Kim Jae-gyeom were initially named as witnesses but were later removed from the list. Ahead of the audit, lawmakers had raised concerns that home shopping companies, whose growth has stalled amid declining TV viewership, are passing various costs on to small and medium-sized suppliers. The audit is expected to examine trade practices — including sales commissions, payment terms, broadcast scheduling and contract conditions — as well as compliance with mutual cooperation obligations.

CJ CheilJedang, Samyang named as witnesses over food price-fixing

Flour and sugar products on display at the Hanaro Mart Yangjae branch in Seocho-gu, Seoul. [Herald DB]

A series of food industry price-fixing cases uncovered this year will also receive significant attention. At the Agriculture, Food, Maritime Affairs and Fisheries Committee's audit of the Ministry of Agriculture, Food and Rural Affairs, scheduled for Wednesday, CJ CheilJedang Executive Vice President Jo Young-sik, Samyang CEO Lee Un-ik and Lotte Chilsung Beverage CEO Park Yun-gi are set to take the witness stand over collusion allegations. CJ CheilJedang and Samyang were both implicated in this year's flour, starch syrup and sugar price-fixing cases. Lotte Chilsung Beverage, which procures sugar from those companies, is expected to face questions about damages it suffered as a result of the collusion.

Food company representatives are also understood to have been included in the Political Affairs Committee's witness list — still under negotiation between the ruling and opposition parties — in connection with the price-fixing cases. However, they could be dropped from the final list as talks continue.

In the food sector, Dongwon Group Chairman Kim Nam-jung and Dongwon Industries Executive Director Park Young-ho were initially named as witnesses before the agriculture and fisheries committee but were removed from the final list. Dongwon Group had faced questions over the alleged purpose behind its recruitment of a former senior Ministry of Oceans and Fisheries official.

MBK's Kim Byung-ju may appear for second straight year over Homeplus

The Homeplus crisis will be taken up by the Industry, Trade, Resources, SMEs and Startups Committee. MBK Partners Chairman Kim Byung-ju has been named as a witness for the Ministry of SMEs and Startups audit scheduled for Wednesday. Kim, who leads MBK Partners, the controlling shareholder of Homeplus, is expected to face questions about accountability for the company's court receivership proceedings and the damage suffered by tenants and suppliers.

If Kim takes the stand, it would be his second appearance. He testified as a witness at the Political Affairs Committee's national audit last October in connection with the Homeplus crisis, at which he formally apologized and expressed his intention to contribute 500 billion won ($368 million) of his personal assets. Later that same month, he submitted a notice of absence for the Climate, Energy, Environment and Labor Committee's audit, with MBK Vice Chairman and Homeplus CEO Kim Gwang-il appearing in his place.

MBK Partners Chairman Kim Byung-ju answers lawmakers' questions as a witness at the Political Affairs Committee's national audit of the Korea Fair Trade Commission at the National Assembly in Yeouido, Seoul, on Oct. 14 last year. [Herald DB]

soho0902@heraldcorp.com