Individual creditors of JTBC are holding a protest in front of the Blue House, demanding their "retirement funds back." [Photo=Yonhap News]

Discussions regarding the JoongAng Group crisis—a conglomerate on the verge of disintegration—have remained limited and repetitive thus far. Attention has been focused solely on the downfall of Hong Seok-hyun and Hong Jeong-do, who have long posed as prominent figures, and the collapse of the supposedly robust media outlets, JoongAng Ilbo and JTBC. Such circular discussions must stop. The core issue lies elsewhere: the suspicion of a "planned bankruptcy" by the JoongAng Group.

This refers to the possibility of criminal acts that the father-son duo, Hong Seok-hyun and Hong Jeong-do, may have committed to escape the threat of insolvency. Specifically, if the charge of fraud—issuing corporate bonds while concealing the company's capital impairment—is proven, they cannot escape criminal punishment. While one cannot jump to conclusions, the possibility that they engaged in a dangerous "game of hot potato" out of a greed to secure funds (corporate bonds and commercial paper) despite being insolvent is quite high.

While the Financial Supervisory Service (FSS) is currently looking into these matters, that is not enough. If necessary, a prosecution investigation is required, as argued by attorney Lee Bok-hyun (former FSS governor). If we fail to have a proper discussion simply because of the reputation of media outlets like JoongAng Ilbo and JTBC, we are not a normal society. Moreover, it would violate legal equity when compared to cases like Homeplus, STX Group, and Dongyang Group, which faced punishment for similar offenses.

The crux of the matter is the corporate bonds worth 790 billion won (an estimate by the group representing individual creditors affected by the JoongAng Group crisis). This is blood-earned money that ordinary citizens saved for retirement, marriage, or living expenses, and it will be completely frozen the moment the JoongAng Group enters court receivership.

Therefore, an investigation free from doubt is essential for the recovery of their property rights, and it is also necessary for the restoration of honor for Hong Seok-hyun and Hong Jeong-do should they be found innocent.

The situation actually becomes more suspicious the more one looks into it. If corporate bonds wrapped in an investment-grade rating (BBB) reached default just four months after issuance, an inspection of the entire process—issuance, distribution, and sale—of JTBC corporate bonds is unavoidable. Naturally, all financial institutions involved, such as Shinhan Securities, Kiwoom Securities, and Hanyang Securities, are also subject to investigation.

A recurring question is: "Did the management really not know about those distressed bonds?" It is a situation that requires resolving the outcry of creditors who are calling it "a clear case of distressed bonds and JoongAng Group investment fraud."

To be clear, as a critic, I had already alerted the public that "JoongAng Ilbo and JTBC are teetering" through newspaper columns and YouTube broadcasts as early as June 2024, after realizing the capital impairment situation at JTBC.

And yet, are we to believe the management didn't know? That is preposterous. At the time, even left-leaning media outlets like Media Today covered the news, which was kept quiet only by the major conservative dailies.

Hong Seok-hyun and Hong Jeong-do. [Photo=Yonhap News]

Shortly thereafter, multiple articles appeared regarding the Hong family's desperate attempts to sell off real estate. For this reason, the explanation provided by attorney Lee Bok-hyun—that he is "looking into all bonds issued by the JoongAng Group from the second half of last year until just before the application for rehabilitation"—is insufficient.

Not only those around 2024, but all bonds issued by the JoongAng Group prior to that, particularly those concentrated in August 2025 and February 2026, must all be subject to investigation. If they sold bonds to investors while knowing that the possibility of repayment was significantly low, this could constitute fraudulent unfair trade practices under the Capital Markets Act.

Such suspicions bear a resemblance to the recent Homeplus incident, where default occurred immediately after the issuance of large-scale electronic short-term bonds. Former lawmaker Kim Woong pointed out that "JTBC selling bonds just before bankruptcy and then suddenly filing for corporate rehabilitation is similar to the Homeplus case," which fits that context. It goes without saying that all of this amounts to fraud or fraudulent unfair trade practices.

The prosecution's request for arrest warrants for executives including Homeplus Chairman Kim Byung-ju last January is essentially in the same vein. Kang Duk-soo, former chairman of STX Group, was also indicted for charges related to forcing subsidiaries to purchase commercial paper of the struggling STX Construction back in 2011–2012. He was eventually sentenced to two years in prison with a four-year suspended sentence by the Supreme Court.

Furthermore, the JoongAng Group issue is similar to the Dongyang Group crisis that dismantled the conglomerate a decade ago. At the time, former Dongyang Group Chairman Hyun Jae-hyun was arrested in 2014 on charges of issuing 1.3 trillion won worth of distressed corporate bonds. He served a full seven-year prison term after 170.8 billion won of the distressed bonds were recognized by the court.

What should also be examined at this time is the structural weakness of JTBC's financial structure, which has been difficult to consider as that of a normal company for the past decade. Since the station's inception, it has only turned a profit in two years: 2017 (9.8 billion won) and 2018 (12.9 billion won). Otherwise, it has suffered a cumulative deficit reaching a staggering 729.3 billion won, including large-scale losses for three consecutive years from 2023 to 2025. As of the end of last year, the cumulative deficit amounted to a massive 2.8 trillion won.

Those in the know understand that this is all due to the Hong Seok-hyun and Hong Jeong-do style of "bluff management"—or rather, "gambling management." Given such leadership, the probability is high—extremely high—that they engaged in immoral acts such as exploiting the media's name to loudly sell bonds just before bankruptcy and then abruptly filing for corporate rehabilitation.

In fact, in my very first column, I referred to Hong Jeong-do—who made the worst remark in media history during the 2015 JoongAng Ilbo 50th-anniversary event by saying "unverified facts can also be valuable information"—and his father Hong Seok-hyun, who applauded that disgraceful statement, as the "two worst villains in the media industry."

That was not an emotionally driven criticism. Could this unhinged father-son duo be capable of committing even a planned bankruptcy without a second thought?

The concern is that the Lee Jae-myung administration might opt to go easy on the JoongAng Group in the current situation. They could make a political decision to cover up all the suspicions raised so far, simply because JoongAng Ilbo and JTBC are on their side.

If they seek a quiet resolution for the sake of convenience, as this is an unprecedented bankruptcy case for a media outlet, neither the Lee Jae-myung administration nor the JoongAng Group will be able to escape the resulting backlash.

Let us reaffirm common sense: companies can fail. However, suspicions that shake investor trust must not be left unaddressed. There is only one lesson from the JoongAng Group crisis: media outlets are no exception, and in the capital market, no one is above the law. What the people are demanding right now is not a witch hunt against Hong Seok-hyun and Hong Jeong-do.

In a rule-of-law nation, suspicions must be verified through investigation, and responsibility must be determined by evidence. Our conclusion in the current situation is self-evident: an investigation without special treatment, a truth-finding process without sanctuaries, and a fair conclusion based on the law—that is all. It is also clear that this is the path to protecting investors and preserving the integrity of the Republic of Korea's capital market.

The public's questions can be summarized into three points: First, what was the actual financial state of the JoongAng Group until immediately before the rehabilitation application? Second, what was the extent of the liquidity risk at the time? Third, were these risks appropriately reflected in the investment prospectuses and public disclosures when the corporate bonds and commercial paper (CP) were issued? Answering these questions is the duty of the financial authorities and the prosecution under the Lee Jae-myung administration.

◆ Critic Jo Woo-seok

Current affairs critic. A leading South Korean cultural commentator, having served as a reporter for the Seoul Shinmun, cultural editor at the Munhwa Ilbo, and senior cultural reporter at the JoongAng Ilbo. Having served as a member of the KBS Board of Directors and the Park Chung-hee Presidential Memorial Foundation, he is a recipient of the Korea Publishing Criticism Award (2008) and the 25th Seoul Journalists Club Column Award (2010).