South Korea slaps more penalties on news media

SEOUL, South Korea, AP

A government watchdog on Thursday slapped penalties totaling 24.2 billion won (US$18.6 million) on 13 major dailies and TV stations for illegal trading with affiliated companies or owners’ families. Critics charged that the latest government action was another attempt to muzzle a critical media, following charges of huge tax evasions made a day earlier against the nation’s leading newspapers and TV stations.

Announcing the results of a three-month probe, the government’s Fair Trade Commission said 10 major dailies and three national TV stations were found to have engaged in illegal internal trading totalling 543.4 billion won (US$418 million) between April 1997 and last March.

The findings led to the imposition of fines totaling 24.2 billion won (US$18.6 million), it said.

Top dailies said they cannot accept the findings by government regulators and will appeal Thursday’s penalties.

When tax officials announced the results of a 4 1/2 month audit a day earlier, they withheld details of violations allegedly committed by each news organization, saying that doing so would violate the law. But as regards the findings of the FTC, the government said it is not bound by law to withhold any details.

The mass-circulation Dong-A Ilbo was slapped with the largest penalty of US$4.77 million, followed by the Chosun Ilbo with US$2.6 million, the Munwha Ilbo with US$2.27 million and the JoongAng Ilbo with US$1.90 million.

The dailies were accused of illegally helping their affiliated companies by carrying free advertisements, buying corporate bonds below market prices or paying excessively for services provided by the affiliates.

The three national TV stations — KBS, MBC and SBS — were ordered to pay fines ranging from US$833,000 to US$1.16 million for similar irregularities.

Some of the dailies were accused of selling shares to owner families below market prices or buying stocks from them above market prices.

On Wednesday, tax officials accused the nation’s 23 major newspapers, TV stations and news agencies of evading corporate and business taxes totaling 505.6 billion won (US$339 million) during the 1995-2000 period.

The government said the audits were routine as required by law. But critics charge that they were part of government attempts to mute certain media which are critical of President Kim Dae-jung’s North Korean and other policies.

The nation’s three major newspapers — Chosun, Dong-A and JoongAng — are particularly critical of Kim’s “sunshine” policy of engaging North Korea, calling it a one-sided appeasement overture that has not been reciprocated by the North.