Financial Industry Union demands government to give up mega bank plan
The labor union of Woori Financial Group on Monday called on the government to stop its attempt to privatize the state-controlled company by selling it to another major banking group.
The government’s plan to privatize Woori is likely to result in an acquisition by or a merger with a rival bank, creating a “mega bank” which would pursue high-risk business and limit consumers’ choice of financial services, the union said in a press conference.
The union vowed to launch a general strike should the government go ahead with a merger or an acquisition.
The Public Fund Oversight Committee, which handles state asset sales, said a week ago it will receive preliminary bids for the 56.97 percent government stake until July 27. The sale plan comes after financial authorities failed to attract a preferred bidder for Woori Financial several times between 2010 and 2011.
The state-run Korea Deposit Insurance Corp. owns the stake that is valued at about 6.3 trillion won ($5.56 billion).
The union demanded that the government offer about 30 percent of the stocks to the general public at discounted prices, about five percent to Woori Financial employees and sell the remaining 22 percent in block deals through competitive bidding.
The union also insisted that Woori Financial’s subsidiaries Kyongnam Bank and Kwangju Bank should be sold off separately to the local people as they are key parts of the regional economy.
“Instead of a forced privatization using foreign or other banks’ capital, we demand offering stocks to the general public so the taxpayers’ money (the public funds that were injected in Woori in the aftermath of the 1997-98 Asian financial crisis) can be redistributed to the people,” Woori Bank union chief Lim Hyuk said.
“The rest should be sold to Woori Financial employees or in block deals through competitive bidding.”
Under the government plan, a buyer is required to bid for a minimum of 30 percent share, and all Woori Finance subsidiaries, including the two regional banks and the brokerage unit Woori Investment & Securities Co., will be sold to a single buyer.
To facilitate the sale of the government stake, the committee said it will seek to limit KDIC’s voting rights and give the buyer more managerial autonomy.
While KB Financial Group is known as one of the most likely bidders, the union chief of KB Kookmin Bank union said Kookmin’s staff were against a merger.
“A mega bank is not right for the Korean financial industry. It will only harm bank employees,” he said.
Kim Moon-ho, head of the Korean Financial Industry Union, urged financial authorities to “get away from the illusion about mega banks.”
“The merger of Kookmin Bank and Housing & Commercial Bank (in 2001) was supposed to foster a global investment bank, but they’re still doing retail banking,” Kim said.
By Kim So-hyun (email@example.com