GS Homeshopping under investigation in bribery case

By Kim Se-jeong

At least two former executives of GS Homeshopping, the country’s largest home shopping company, are under investigation for allegedly receiving bribes from electronic goods suppliers in exchange for exclusive contracts.

The prosecution said Monday that three officials from the supplier companies were also the subjects of their investigation. The companies sold electronic goods made by conglomerates such as Samsung and LG.

The names of the officials were withheld, though the prosecution said it would summon them for questioning soon.

The accused GS Homeshopping executives allegedly received money from separate suppliers in February last year and in December 2012. The prosecution said it had acquired evidence showing that hundreds of millions of won had been transferred to their bank accounts.

The prosecution added that one of the two had allegedly embezzled almost 4 billion won ($3.7 million) from GS Shop T&M, one of GS Homeshopping’s affiliates, which supplied goods for the channel. GS Homeshopping established the affiliate in June 2011 with an initial investment of 4 billion won, but the company closed in October last year.

The executive managed the affiliate company from June last year until February this year, and after retirement was offered a job with another company that manufactures electronic goods.

The prosecution said it was currently inspecting bank account records for the two senior executives and the companies involved.

This case follows corruption scandals involving Lotte Homeshopping and NH Homeshopping.

The country’s home shopping companies were established in 1995 as part of a government plan and the industry bloomed over the years, with many companies jumping in to compete.

However, the business has been tainted with corruption scandals.

In August last year, the prosecution indicted two NH Homeshopping officials on charges related to illegal loans worth almost 1.8 billion won ($1.68 million).

In April, a number of Lotte Homeshopping representatives were indicted for having allegedly favored certain products in their advertising. Producers of the home shopping programs were involved, having supposedly received money for giving popular time slots to certain products.