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Financial firms await leadership changes, extensions

Authorities close in on alleged influence by incumbents for reappointments

After reeling under a series of corruption scandals last year, South Korea’s major financial institutions are to carry out a leadership reshuffle and corporate governance restructuring this year.

While some quickly rounded off their leadership shakeout before the start of the new year and moved on to practical goals such as measures for digitalization and the incoming key interest rate hike, others have yet to complete leadership changes or reappointments.

One of them is Hana Financial Group, the nation’s third-largest banking group by assets, whose incumbent Chairman Kim Jung-tae’s term is to end in March.

Kim, who has served two consecutive terms dating to 2012, is a front-runner among the group’s list of 27 candidates, but faces opposition from financial authorities.

Financial Services Commission Chairman Choi Jong-ku earlier pointed out that banking group chiefs tend to exert influence upon the directorate board in order to be reappointed to their post.

“Financial group chairmen or bank CEOs can often induce their own reappointment by recommending themselves and then exerting pressure upon the board or leadership election panel,” the chief financial supervisor said last year.

His comment was considered as taking direct aim at Hana Financial chief Kim, as well as KB Financial Group Chairman Yoon Jong-kyoo.

The Financial Supervisory Service is also set to investigate within this month the corporate succession process and leadership recommendation panel operation in major financial holding companies here.

Responding to such mounting pressure for a leadership overhaul, KB Financial’s Yoon took a step back from his management monopoly and handed over the bank chief position to Vice President Hur Yin in October last year.

(Yonhap)
(Yonhap)

Hana Financial made a reciprocating gesture of excluding Kim from the leadership recommendation panel but recently listed him as one of the candidates, making it highly plausible for the standing chief to prolong his term in office.

The nation’s agriculture-backed NH Financial Group is also facing a leadership turning point, as its current second-term Chairman Kim Yong-hwan’s term is to end in April.

While applauded for his reformatory moves over nonperforming loans of the ailing shipbuilding and shipping industries, Kim has also been cornered on the allegation that he exerted recruiting pressure upon a senior FSS official. Recently acquitted from the charges, Kim is said to seek his third election to the post, but is facing pressure to give way to other candidates.

Woori Bank, which reeled under a similar recruiting scandal last year, took a faster move in reshuffling its leadership. New CEO Sohn Tae-seung took office in December to replace predecessor Lee Kwang-goo, who stepped down mid-term amid ongoing investigations.

Among state-run financial institutions, the Korea Deposit Insurance Corporation is expected to welcome a new chief during the first half of the year. Its current Chairman and President Gwak Bum-kook, whose term is to end in May, is largely seen as standing at odds with the progressive Moon Jae-in administration due to his close affiliation with the former conservative Park Geun-hye administration. 

By Bae Hyun-jung (tellme@heraldcorp.com

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