According to a report by the South Korean newspaper, The Korea Economic Daily, on the 24th, KT&G, a South Korean tobacco company, has been revealed to annually use company funds to support non-executive directors' business trips abroad, sparking controversy over the company's fund usage.
According to sources familiar with the matter, the former president of KT&G, Baek Pok-in, has decided not to seek reelection and a new president will be elected at the shareholders' meeting in March. Among the board members, six are non-executive directors, some of whom have previously embarked on luxurious overseas business trips.
KT&G has announced that since 2012, some of its directors have been taking annual trips abroad. These trips are typically made to countries where KT&G has a presence and serve the purpose of conducting "overseas training" or "overseas business inspections." Some directors have even taken the opportunity to visit tourist attractions with their family members.
KT&G provides business class round-trip tickets and hotel accommodations to non-executive directors, along with additional cash for expenses such as meals and transportation. When questioned, company staff explained that these overseas business trips are aimed at gaining insights into global operations. Directors visit local markets and production facilities, meet with overseas experts, and study potential new business opportunities. KT&G emphasizes that these trips are in line with company regulations.
According to sources, KT&G incurs an average overseas business travel expense of approximately 6.8 million Korean won per non-executive director, excluding airfare. However, controversy surrounds the involvement of non-executive directors in activities such as cruise trips and hot air balloon experiences during these business trips. KT&G's staff has clarified that "these incidents occurred in 2012 and 2014 and have no relation to the current non-executive directors."
Baek Pok-in's decision not to seek re-election and the controversy surrounding his involvement as a non-executive director in overseas business trips could potentially impact the company's future governance structure and financial transparency.
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