Nonghyup executives under fire as calls mount for chairman’s ouster
Choi Won-byung, chairman of the embattled National Agricultural Cooperative Federation, faces intensifying pressure to step down as soon as possible to accept responsibility for the latest network crash at the nation’s largest banking network.
On April 19, top unions representing the nation’s agricultural cooperatives gathered together to call for Choi’s ouster, claiming he was unfit to carry out the job any longer.
It was under Choi’s watch that the National Agricultural Cooperative Federation, also known as Nonghyup, suffered a network crash that crippled banking services for the firm’s 30 million customers.
The damages caused by the crash have yet to be determined, and Nonghyup has promised full compensation.
But this hardly means the end of things since the authorities are now investigating into who caused the meltdown after evidence started to be uncovered that it was most likely an intentional act of cyber terrorism.
After the probe is over, many expected Choi to come under even stronger calls to resign.
Fate took an unexpected turn for the 55-year-old Choi who had reason to believe he would end his four-year term at the end of this year with no glitches and possibly even aim for a second term,
That would have been the last time Choi would run for the post due to a change of laws in 2009 restricting chairs to a single four-year term.
The frustration and mortification Choi was suffering was blatantly obvious when he told reporters that the crash was not his fault, and that he too was a victim.
Nonghyup chairman Choi Won-byung (left) answers questions at the National Assembly on Wednesday. (Yang Dong-chul/The Korea Herald)
“That’s really leadership for you,” said one industry insider close to the issue who declined to be identified.
Choi eventually issued a public apology, but his anger and humiliation, not to mention lack of responsibility, was not easily forgotten, as proven in the many blogs that fumed over his remarks.
Insiders, however, believe the roots of Nonghyup’s teetering leadership at Nonghyup go back to the election process.
“The chairmen are not elected by the farmers, nor the employees or the public; they are chosen by the heads of the provincial branches of Nonghyup, meaning that the chairman feels no need to satisfy his company or clients,” one source said.
Winning the hearts of Nonghyup branch chiefs would therefore most likely be at the very top of priorities for Choi.
“Plus, the chairmen have never been much of a manager or business person as they usually come from provincial Nonghyup branches or similar organizations with no financial background, even though Nonghyup is now very much a financial company of considerable breadth,” the source said.
With more than 30 million customers, Nonghyup has visibly come a long way from when it started out representing local Nonghyup branch offices that wanted their rights defended, as well as providing financial assistance to local farms and related industries.
The company has a wide scope of businesses, but financial services have now become its main focus; Nonghyup operates about 200 trillion won ($183.5 billion) worth of funds.
Despite its breadth and significance, Nonghyup has a guaranteed customer-base in the provincial Nonghyup branches, meaning it has had felt no real need to innovate or reform despite constant calls for such change.
Nonghyup has expressed hopes that the network crash would provide an opportunity to improve itself and streamline its operations.
The firm’s financial business continues to lag in profit, and its lack of an efficient central system for managing its network has been pointed out on many occasions over the years by both the government and public.
The single four-year term was the result of such efforts taken by the government’s Nonghyup reform committee.
“We are most sorry for the troubled caused by the network crash, and we will take every effort to remedy it and put preventive measures in place,” said Park Ji-won, a spokesman for Nonghyup.
By this Friday, Nonghyup expects all operations and services to have returned to normal.
Compensation will follow, along with penalties based on the progress in the prosecution’s investigation.
The fate of Choi, until then, hangs in balance.
By Kim Ji-hyun (email@example.com