"Yoon Suk Yeol Administration Improperly Intervened in Full Sale of YTN Stake"

[Financial News] The KCC and MOTIE intervened in changing the method of selling YTN shares during the Yoon Suk Yeol administration, a BAI audit found. The audit determined that they pressured KEPCO KDN and KRA to change their agreement to sell only 29.99% of their shares to a full sale. BAI deemed this an infringement on the autonomy of public institutions and sent investigative reference materials concerning two individuals to the CIO.
BAI released its findings on the "audit of the YTN stake sale" on the 14th. It prioritized the YTN stake sale while auditing the management of public institution assets from April to May.
The audit found that KEPCO KDN and KRA agreed in August 2023 to jointly sell only 29.99% of the 30.95% stake they held in YTN. The decision was based on the view that lowering the stake to 29.99%, in consideration of the 30% limit under the Broadcasting Act on ownership of broadcaster shares by large companies and others, would broaden the pool of potential buyers and maximize the sale proceeds.
According to BAI, the KCC chair at the time asked the MOTIE vice minister in late August or early September of that year to sell the entire YTN stake. The vice minister subsequently summoned officials from KEPCO KDN, KRA, and the lead sale adviser and instructed or pressured the two institutions to sell all of their holdings simultaneously.
The KCC chair at the time also instructed working-level officials to send an official letter to MOTIE and MAFRA stating that it would be advisable to consolidate the stakes and sell them in full. BAI found that no separate discussion or deliberation had taken place at the KCC during this process.
As a result, KEPCO KDN and KRA changed their agreement to sell all 13 million shares, contrary to the existing agreement and the sale adviser's opinion, and announced the tender on the 21st of the same month.
BAI determined that, in this process, MOTIE and the KCC improperly caused public institutions to alter an agreement they had concluded through legitimate procedures, infringing on the autonomy of decision-making guaranteed under the Act on the Management of Public Institutions. It also pointed out that changing the terms to a full sale resulted in excluding large companies and others subject to share-ownership restrictions from participating in the bid.
Only three companies participated in the competitive tender held in October 2023. One of them won all of the YTN shares held by KEPCO KDN and KRA for 319.9 billion won.
However, BAI said it was difficult to determine whether the stake had been sold at an undervalued price. It cited the absence of problems with the highest-bid pricing method or the calculation of the reserve price, while noting that although participation by large companies could have increased the management-control premium, its amount could not be determined.
BAI issued warnings to the Ministry of Climate, Energy and Environment and the KMCC, respectively. On the 11th, it also sent investigative reference materials concerning two individuals to the CIO.
[email protected] Seong Seok-woo Reporter