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NongHyup M&A bid questioned after leak

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Published : 2014-01-24 20:20
Updated : 2014-01-24 20:20

Some lawmakers have begun to tackle NongHyup Financial Group’s status as the preferred bidder for Woori Investment & Securities in the wake of the data leakage accident involving stolen information of NongHyup Card holders.

Rep. Kang Gi-jung of the main opposition Democratic Party pointed to past irregularities of NongHyup Financial Group during a financial regulators’ report to the parliamentary National Policy Committee on Thursday.

Stressing that many irregular practices, including the hacking incident, have occurred at NongHyup Financial over the past few years, Kang asked Financial Services Commission chairman Shin Je-yoon “whether the group is qualified for the acquisition of Woori Investment & Securities.”

The FSC, in its bid to retrieve taxpayers’ money, is pushing to privatize Woori Investment, one of the nation’s top three brokerage houses, and its affiliates. NongHyup Financial is conducting due diligence on the Woori brokerage unit as the preferred negotiator, selected by the FSC.

While FSC chief Shin has not made any direct comment on Kang’s rebuke, he has also not downplayed the series of financial mishaps at the group’s units, including NongHyup Bank, whose subsidiary is NongHyup Card.

On Friday, Kang, who is in charge of the Democratic Party’s special committee on the leakage scandal, called on the National Assembly to launch an investigation into the FSC, the Financial Supervisory Service, NongHyup Card, KB Kookmin Card and Lotte Card.

Along with NongHyup Card, police and financial authorities revealed earlier this month that the two other credit card issuers collectively lost private information of up to 15 million customers.

In March 2013, it took about a week for NongHyup Bank to normalize the operation of its automated teller machines, after its network was paralyzed by cyber attacks.

Earlier, the bank reported delays in repairing its online system when it was severely hit by hacking attacks in 2011, resulting in a stern probe by financial regulators.

Last year, regulatory inspectors revealed that NongHyup Bank engaged in unauthorized lending worth 41.4 billion won ($38.3 million).

Despite the saturated credit card market and a variety of side effects from reckless issuance, NongHyup Financial embarked on its project to spin off the credit card unit from NongHyup Bank last year.

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

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