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[Newsmaker] Defiant KB chief creates stir

KB Financial Group chairman Lim Young-rok has become known for two things: being the first financial group chairman to be slapped with a severe penalty and the first to defy the authorities’ sanction.

Late Tuesday night, Lim filed an administrative suit against the Financial Services Commission to have the watchdog withdraw its three-month suspension order.

“Through the legal procedure, I look forward to revealing the distorted truth (surrounding the banking unit’s computing system change) and that the group officials have not violated any laws,” Lim said in his written complaint. 
Lim Young-rok
Lim Young-rok
“I hope that KB Financial and I can recover from our damaged reputation,” he added.

In a tit-for-tat move, the FSC and Financial Supervisory Service on Wednesday set up a legal team to counter Lim, who has been pressured by the company’s board to resign.

“We have been preparing for the situation as Lim’s lawsuit was widely predicted. We hope that the KB board makes a wise decision before this turns into a legal fight,” a high-ranking government official told local media.

The KB board on Wednesday discussed Lim’s dismissal.

The board members are expected to vote or discuss again on Friday whether to remove him from his post.

More than six of the nine board members have to vote in favor of the suspension plan to force Lim’s resignation.

However, reaching a consensus will not be easy, an outside director of the board told another local daily.

“Clearly, each board member has different thoughts and opinions (on how to deal with the situation),” he said.

Last Friday, the FSC officials unanimously approved the suspensions against Lim and Lee Kun-ho, CEO of KB Kookmin Bank, the group’s flagship unit.

The financial authorities held the two chiefs responsible for a series of scandals involving an apparent power struggle, and failing to manage risks.

According to the watchdog, Lim and three other KB executives pushed ahead with a plan to switch the bank’s computing system from the IBM-based mainframe system to Unix.

Irregular practices have been detected in the process, the regulators said, such as fabrication of the new system’s performance results to conceal its security risks.

Lee immediately offered to resign, while the chairman dug in his heels, saying that an injustice had been done to him.

KB Financial is expected to stay on the financial authorities’ radar for some time, observers said, as it is involved in a string of scandals including a massive data leak that took place earlier this year.

By Suk Gee-hyun (