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Controversy grows over S. Korean firm's 'excessive' payment proposal for distribution of Rodong Sinmun

North Korea 16:24 October 04, 2019

SEOUL, Oct. 4 (Yonhap) -- A new contract awarded to a local news outlet to distribute contents from North Korea's Rodong Sinmun newspaper is garnering criticism amid concern that the deal, sealed after an offer to triple the original payment offer, could turn inter-Korean news exchanges into a solely financial matter.

News1, a news agency associated with the MoneyToday Media group, purchased the rights to distribute Rodong Sinmun contents from Korea Media, a Japan-based broker handling the issue on behalf of the North's official newspaper.

The distribution rights were previously held by South Korea's key wire service, Yonhap News Agency.

News1 reportedly offered to pay three times as much as Yonhap to win the contract, according to sources. But after the government found the payment scheme excessively high, the company recently submitted a revised contract to reflect lowered prices, the sources said.

The outlet needs final state approval before distributing the content of the Rodong Sinmun. The culture ministry approved its handling of such "special materials" last month, but the company has yet to win permission from the unification ministry.

The final amount News1 proposed to pay is not known. But observers say that there is a possibility of a back-door deal having taken place between the two private entities for higher prices.

The government appeared to be aware of such concerns.

"There is no way to figure out if there is such a back-door deal, but the government, for its part, will make efforts to prevent such things from happening," a unification ministry official said on condition of anonymity.

Such back-door deals would be hard to regulate and could open the gate for fierce competition that would jack up the cost of the rights to distribute the newspaper, which provides a rare window into the reclusive North.

"In order for inter-Korean civilian exchanges to get back on the right track, the government should play a coordinating and controlling function," professor Yang Moo-jin, a top North Korea expert at the University of North Korean Studies, said.

"If nothing is done about exchange projects seeking only profits at a sensitive juncture in inter-Korean relations, it could have negative effects on the inter-Korean peace process itself," he said.

In apparent recognition of the concerns, the Inter-Korean Exchange and Cooperation Act requires the government to keep a lid on excessive competition among South Korean firms for projects involving North Korea to prevent it from hurting national interests.

A similar case happened during the administration of late former President Roh Moo-hyun. At the time, the North had attempted to change the South Korean operator of tours to the North's ancient border city of Kaesong from Hyundai Asan to a Lotte Group subsidiary after Lotte offered a higher payment.

But the unification ministry refused to approve the deal over concern that such an inter-Korean project is not just about money, and that if the new deal is approved, the tour's operator could change every time a higher offer is made.

Yonhap News Agency, South Korea's representative news agency, had been providing the content of the North's newspaper, along with relevant stories, since March 2017 but Korea Media unilaterally terminated the contract late last year, without providing reasons.

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