The chief of South Korea’s financial watchdog imposed a heavy punishment on the heads of KB Financial Group and its flagship Kookmin Bank, overturning an earlier decision by the disciplinary committee. This was the first time that the watchdog has rejected the panel’s nonbinding decision.
The Financial Supervisory Service Gov. Choi Soo-hyun said Thursday that KB Financial Group chairman Lim Young-rok and Kookmin Bank president Lee Kun-ho would receive a “reprimand” warning, the third-heaviest in the five-level punishment system.
|from left) Lim Young-rok, Lee Kun-ho|
Choi thus vetoed the FSS disciplinary board decision, which alleviated the sanction from “reprimand” to “attention” late last month.
The heavier punishment handed down by Choi would ban both KB officials from taking a post in the financial industry for three years after they retire. But it does not force them to step down from their current post immediately.
Back in May, the FSS announced an unprecedented mass sanction on over 200 financial company officials including Lim and Lee, who were held responsible for a series of irregularities and mismanagement.
KB Financial Group, over the past months, has been disturbed by a leadership feud over the bank’s main computing system replacement. Kookmin Bank had also been involved in the mass customer information leak in the first quarter, as well as a series of illicit loans in its overseas branches.
Financial circles, however, complained that the level of punishment was too severe and that most of the allegations were internal issues to be dealt by the corresponding organization.
“We will stick to the law and basic principles in dealing with the issue,” Choi said repeatedly, making it clear that he would push ahead with the heavy sanction despite opposition.
By Bae Hyun-jung and news reports