- MBN's Illegal Fund-Raising and Acts of Deception

The word media is a plural form of the Latin word medium, which means “a middle ground.” As a medium connecting people and the world, news and broadcasting systems should follow solid media ethics, including pursuits of truth, the realization of social justice, and respect toward human beings. However, at times, media channels' traits as a private company to generate profit can conflict with the pursuit of public interest. Recently, such a dilemma between private interest and media ethics rose to the surface in South Korea. Maeil Broadcasting Network (MBN), a comprehensive programming channel covering news, drama, entertainment, and culture, has been suspended for violating the Broadcast Act. In the new untact society, media has become more of a *home* to the people's eyes and ears. Now may be a relevant time to reflect on the ethics of media.


On October 30, the Korea Communications Commission (KCC) imposed a strong administrative measure on MBN, requiring all broadcasts to be suspended for six months. An illegal capital provision of MBN was the main cause of the punishment. In order to launch a comprehensive programming channel in 2011, MBN made a borrowed-name investment to cover the minimum paid-in capital of 300 billion Korean won. MBN employees were lent 60 billion won from a bank, later buying stocks with the money and making borrowed-name investments, and eventually raising illegal funds for the establishment of a comprehensive programming channel. Later in a 2014 and 2017 comprehensive channel re-approval evaluation, MBN again submitted a false stockholder list and forged financial statements, carrying on the offense. 


The Price for the Illegal Action
According to the current Broadcast Act, MBN's illegal capital provision is a serious offense that could even have led to a cancellation of approval for general programming channels. After arguments on whether to cancel the approval or suspend broadcasting activities, KCC decided to suspend all the broadcasting services by MBN. Such a decision implied that MBN admitted the fact regarding the illegal capital expedient at the time of its establishment, and KCC further filed criminal charges against MBN and former Maeil Business TV (MBTV) and its representatives at the time. 


However, the administrative disposition has received a grace period of six months. The reason for this is to protect the people's right to watch and to save small-sized production companies and broadcasting channel operators that have been producing programs for MBN. By offering a grace period, KCC aims to give audiences a sufficient notice time regarding the suspension of MBN's broadcasting activities, as well as minimize the shock that goes toward the broadcasting market. 


Adding Insult to Injury
The problems have continued bumper to bumper. From November 3 to 6, KCC operated a comprehensive channel review committee to review the re-approval of MBN and Joongang Tongyang Broadcasting Company (JTBC), which were two companies whose validity period of a comprehensive channel license has expired. The approval criteria included public responsibility of broadcasting, the realization of social fairness, cultural necessity, public interest, and programs' adequacy. While JTBC has passed the approval, MBN scored 640 points, less than the basis score of approval of 650 points. Although MBN attained satisfactory evaluations in other matters, it fell astray on evaluation regarding its compliance with broadcasting laws. In this regard, KCC has announced that the unsatisfactory results could lead to a refusal of re-approval or conditional re-approval. Accordingly, KCC stated that they would affirm MBN's solution to the problems pointed out and their plans for enhancement. MBN admitted its faults on October 28 and publicly apologized by acknowledging the illegality and promising to prevent a recurrence of the situation on the day after. 

Professor Shin Haerin. Provided by Shin Haerin.
Professor Shin Haerin. Provided by Shin Haerin.

Future Challenges
Now MBN has to refill the capital worth tens of billions of Korean won that they illegally covered in order to become a comprehensive channel and also pay a fine of 200 million Korean won for the offense. To make matters worse, the six-month suspension of all broadcasts is presumed to bring out a heavy loss for the company. According to Professor Shin Haerin (School of Media and Communication), the actual impact of the sanction would be analogous to closing down the station given the length and severity of the measure. Furthermore, it would entail other types of irrevocable damages, such as losing the viewership base and threatening the livelihoods of employees, other partners, and subcontractors. 


“The verdict certainly serves as a forceful note of caution, not only for other general service channels but to and across all forms of media and legacy,” mentioned Professor Shin. She pointed out the need to seriously reexamine the role and responsibility of the media in terms of its function as public services. South Korea's general service channel approval system itself also has loopholes, requiring a more thorough evaluation of its quality and reliability. Professor Shin emphasized, “The MBN's incident certainly calls for a reexamination of the assessment process for the approval and re-approval system and its actual practice.”


It is no doubt that media, a middle ground connecting people with the world, plays a significant role in our society. Only when the press faithfully performs their role, can transparent politics, economy and social culture be maintained and the people's right to know be enhanced. However oftentimes, as the saying goes, “Much water runs by the mill that the miller knows not of.” That is, the media themselves will first have to abide by the law and strive for transparency in accounting and management. “As part of an established media company with a long history, there would be would be a need for MBN to take its viewership into consideration, implementing proactive measures to readdress the betrayal of trust,” said Professor Shin. The eyes of the people will be on MBN's future course of action and their fresh public appearance six months later.    

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