"Publicizing Sports Toto next year → Securing financial resources for the establishment of a subsidiary of the Industrial Complex" Representative Lim Oh-kyung passed the amendment to the National Sports Promotion Act
Nov 26, 2024
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The Sports Toto issuance project, which has been commissioned to the private sector since 2001, is under publicization scheduled for July next year through the revision of Article 25 of the National Sports Promotion Act in January 2022 as problems were pointed out in the selection and project promotion process.Sports Toto Korea, the current consignment agency, will continue its business until June 30 next year, and from July 1 next year, the Korea Sports Promotion Foundation will entrust the project to a 100% investment company in the industrial complex, not to the private sector.
Sports Toto, which has targeted 6.7046 trillion won in sales and 2.1037 trillion won in profits (Sports Promotion Fund) this year, is the lifeline of Korea's sports budget. While the Ministry of Strategy and Finance was reluctant to establish additional subsidiaries of public institutions due to budget and manpower reasons, some said that Korea Sports Industry Development, the only subsidiary of the corporation, would take over the consignment project of Sports Toto, but the Ministry of Economy and Finance also reportedly agreed with the Ministry of Culture, Sports and Tourism and the corporation that a separate subsidiary is needed considering the expertise and public interest of Sports Toto's business.
The subcommittee of the bill on Mun Jeong-seo seems reasonable in that the National Sports Promotion Foundation secures capital necessary for the establishment of a subsidiary dedicated to the sports promotion voting rights issuance business, and raises the proceeds (current net profit) from the national sports promotion account so that it can be used for the promotion of leisure sports for the people and the promotion of sports" gave an opinion.
Under the current law, in order for the National Sports Promotion Corporation to own the total number of issued shares of a subsidiary dedicated to the project, it must raise capital for the establishment of a subsidiary in the corporate accounting of the corporation, not the National Sports Promotion Fund, and in the case of profits from the consignment operation of the project, it cannot be raised by the National Sports Promotion Fund and accumulates or disposes of them as dividends. The Ministry of Culture, Sports and Tourism expressed the opinion that there is a need to establish a subsidiary dedicated to the project for the publicity, professionalism, and stability of the Sports Toto project, and that a basis for fund investment and a basis for raising profits into funds are needed for this, and lawmaker Lim Oh-kyung proposed an amendment that would be the basis for 'base'. The amendment, which passed the committee, will be promulgated after going through procedures such as the Legislation and Judiciary Committee and the resolution of the plenary session.
The amendment to the 「National Sports Promotion Act」 proposed by Representative Lim allows the proceeds from the investment of Sports Toto-issued projects to be raised as a financial resource for the National Sports Promotion Account.Article 20 (1) 6 of the Fund (Creation of Funds) allows the fund to raise proceeds from investments, etc. under Article 22 (4) 3 through 6 of the Fund, and Article 22 of the Use of the Fund: The account management agency may contribute or invest part of the national sports promotion account, facilities, goods, and other assets of the account management agency in the following funds or projects, etc. to promote national sports, foster youth, promote the sports industry, or raise funds. The total amount of investment related to the Sports Toto issuance project under the amendment is estimated to be 30 billion won. The estimate period is five years from 2024 to 2028, and the additional financial requirements for subsidiary investment are planned to be 10 billion won each from 2024 to 2026, and a total of 30 billion won from 2024 to 2028 (annual average of 6 billion won). According to the 「Year-by-Year Investment Recovery Plan」 submitted by the Corporation to the National Assembly's Culture and Sports Committee, the period during which the investment can be recovered with net income dividends is expected to be 12.5 years.
sky4us@sportschosun.com
