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Watchdog, Hana Financial panel at odds over chairman nomination process

Tension has escalated over the chairman nomination process at Hana Financial Group, following the nomination committee’s refusal to delay the shortlisting of candidates as demanded by the regulator that had cited ongoing probes.

Worsening the standoff was Choi Jong-ku, chairman of the Financial Services Commission, who warned the financial institute during a press briefing Monday.

“If you in the financial sector have an elitist idea and say, ‘No one can interrupt what I do,’ you should think twice about it.”

FSC Chairman Choi Jong-ku (FSC)
FSC Chairman Choi Jong-ku (FSC)
Speculations have been high that Hana Financial Group’s nomination committee was moving toward reinstating incumbent Chairman Kim Jung-tai, eyeing his third three-year term.

On Friday, the Financial Supervisory Service, the regulator of local banking institutions, had urged the committee to “reasonably rearrange” the date for shortlisting candidates.

The FSS cited an ongoing probe that kicked off on Jan. 5 on the group’s chairman Kim and its signature bank’s head Ham Young-joo.

Both Kim and Ham are reportedly included in the shortlist. The finalists will be confirmed on Jan. 22, according to the plan.

They are alleged to be responsible for extending doubtful loans. For instance, the group loaned out a combined 2.2 billion won ($2.1 million) to i-KAIST, a startup devoted to education consulting business, for a year since 2015. In September 2017, i-KAIST was shut down, while its founder, alleged to have had collusive ties with the former Park Geun-hye administration, was sentenced to 11 years in prison and slapped 6.1 billion won in fines for fraud and tax evasion.

But the committee on Sunday refused to follow the regulator’s suggestion, saying it would proceed “as planned” to interview the shortlisted 16 candidates on Monday and Tuesday.

The banking group is also undergoing a second round of investigations by the FSS for hiring scandals.

The watchdog also hinted at sending a stronger signal, if Hana Financial Group continues the process.

Choi of the FSC said Monday it is “up to (Hana Financial Group’s) chairman nomination committee to decide to either accept or refuse the offer,” while adding that the FSS is in charge of addressing the issue. 

Kim has served as the chairman of Hana Financial Group since March 2012. His second term is set to expire in March this year.

Choi said in November that an attempt by top figures in the financial business to get rid of contenders in the nomination process and get reinstated is “an act of neglecting their responsibilities,” while calling for improvements in the corporate governance structure of banking firms.

By Son Ji-hyoung