Speculation rampant that two sides near compromise over merger


Hana Financial Group chairman Kim Seung-yu has been striving to prevent the union of Korea Exchange Bank, which has been acquired by the group, from going on strike.

While KEB unionized workers have threatened to stage an all-out strike, Kim held a low-key negotiation with leaders of the union on Thursday.

According to a speculation, raised by an online news provider, the two parties reached an agreement, which includes that KEB will be operated separately from Hana Bank as a unit in the group at least for three years.

In addition, the news report involves the agreement that the group will ensure about 8,000 KEB employees’ job security at least for three years.

But a Hana Financial spokesman did not confirm the speculation.

“It is true that Kim is holding talks with the union at an unidentified place. We’ve yet to access the result,” the spokesperson said.

KEB union spokespersons were unavailable for comments.

The union, which filed a labor dispute conciliation with labor authorities in late January, will be allowed to stage a strike after Feb. 17 (Friday).

The report said Hana Financial and the union will sign an official pact on their agreements.

Sources said the negotiation between Kim and the KEB union will continue on Feb. 17.

Furthermore, the union leaders have to garner support from the majority of the union members.

On Jan. 27, the Financial Services Commission endorsed the deal between Hana Financial and U.S.-based Lone Star Funds to trade shares of KEB.

The FSC ultimately did not accept the opinion among a group of lawmakers and the KEB union that Lone Star was ineligible to own the bank and the merger deal is invalid.

There have been continuous speculations that Lone Star has been a non-financial investor, which is barred from controlling a Korean bank under local laws.

Despite the allegations, the buyout fund has been entitled to rake in huge management premiums via the coming sale of its dominant stake in KEB.

The fund also has been convicted of manipulating the stocks of KEB’s credit card affiliate in 2003.

Market observers in the financial sector predicted a series of lawsuits and backlash from the political sector and civic groups even after the merger.

Before the regulator’s approval, Hana chairman Kim pledged to ensure the job security of KEB employees.

Kim downplayed the possibility that Hana will conduct a massive manpower restructuring after the takeover.

On Jan. 31, the labor union filed an injunction with Constitutional Court to tackle the financial regulators’ endorsement.

By Kim Yon-se (kys@heraldcorp.com)