Eulji Hospital’s participation in Yonhap consortium accused of violating law

The eligibility of a shareholder in the recently licensed Yonhap News TV has emerged as a matter in dispute.

Local news media has raised the possibility that the Eulji General Hospital may have violated laws to join the tentatively named consortium led by the Yonhap news agency to get a news television license.

The hospital has pledged to hold a 4.959 percent stake in the consortium or about 3 billion won ($2.6 million).

Article 20 of the enforcement ordinance of the medical law stipulates that a non-profit corporation which has established a medical institution shall not pursue profits.

Under article 49 a medical corporation is limited in its incidental businesses to a welfare center for the aged, a funeral hall, a parking lot, a cafeteria, a restaurant, and other services for the convenience of staff and visitors.

A non-profit corporation is allowed to pursue for-profit activities only to the extent that it does not violate the nature of its incorporation.

As the law stipulates, the Ministry of Health and Welfare has applied the regulation strictly against for-profit activities by a medical corporation, such as stock and real-estate investments.

If the Eulji General Hospital is found to have violated the medical law by holding a stake in the Yonhap News TV, its pledge to invest in the consortium cannot be materialized, and the license given to it should be revoked.

The Korea Communications Commission announced in its criteria for the screening of applicants Nov. 10 that it will in principle revoke a license in case of change in the lineup of major shareholders in a licensee.

The investment pledge by the Eulji General Hospital is a matter not only for Yonhap News TV but also for the medical corporation.

According to article 51 of the medical law, if a medical corporation enters a business not stipulated in its articles of association, the authorities may cancel its incorporation.

The broadcasting watchdog has said that it would not change its licensing decision regarding Yonhap News TV unless the Ministry of Health and Welfare ruled the disputed investment illegal.

“There is no clear legal basis about this issue, so we will seek counsel and consider whether it is legal for a hospital to invest in securities,” an official of the ministry told The Herald Business.

By Chun Sung-woo (swchun@heraldcorp.com)