Woori Financial chief offers apology for loose internal control at shareholders’ meeting
South Korea’s top financial regulator Financial Services Commission is to execute an all-out screening of Woori Financial in its attempt to acquire new insurers, its chief announced Wednesday.
The FSC is currently screening Woori Financial’s request to acquire Tongyang Life Insurance and ABL Life Insurance as its new affiliates.
"It is hard to discuss a detailed timeline, as a fair and thorough screening is more important than the schedule. Instead, the screening will be very intensive," FSC Chairman Kim Byoung-hwan said at a press briefing held at Government Complex Seoul on Wednesday.
"Woori Financial is currently at the top of the deliberation agenda for the FSC. We will put in all efforts to not drag (the screening) on,” Kim said.
Woori Financial’s attempt to acquire the two insurers is expected to be bumpy. Earlier this month, the Financial Supervisory Service pulled down the financial service provider's management evaluation by a notch to Grade 3, following a loan scandal worth over 230 billion won ($157 million).
Though a financial firm with a Grade 3 evaluation is deemed "unqualified" to acquire a new affiliate under local regulations, the FSC, however, could approve the acquisition under the condition that Woori Financial improves its balance sheet, such as settling non-performing assets or raising its equity capital. Woori Financial has already submitted its plan to tighten internal control to the FSS.
“We have to analyze why Woori Financial’s rating was brought down to Grade 3 and whether the firm has the potential to meet the requirements again,” Kim said.
Meanwhile, Woori Financial Group Chairman Yim Jong-yong offered an apology for the loose internal control at a shareholders’ meeting that took place on the same day.
"Along with thorough self-reflection, the firm is determined for a complete overhaul to become a trustworthy Woori Financial, reminded that trust is the essence of finance," Yim said at the meeting held at the group’s headquarters in central Seoul.
"We will lead a complete innovation of the overall system with a strong willingness to reset the systemization of internal control. Fundamentally, we will push to boost the ethics of individual employees and establish an ethical corporate culture."
silverstar@heraldcorp.com
