The Korea Herald


Hana Financial chief faces bumpy road ahead of reinstatement

By Son Ji-hyoung

Published : March 16, 2018 - 16:04

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The fate of Hana Financial Group Chairman Kim Jung-tai remains to be seen, as he faces a scandal with just a week left till the group’s shareholders meeting to vote on his third three-year term.

Financial watchdogs have zeroed in on the banking group on allegations of recruitment irregularities, while a revelation by the group’s labor union has added fuel to the scandal, arguing Kim was engaged in wrongdoings in its recruitment process.

Hana Financial Group Chairman Kim Jung-tai (Herald DB) Hana Financial Group Chairman Kim Jung-tai (Herald DB)
An internal committee consisting of external directors nominated the incumbent head for his third-term. The nomination will be put to a vote Thursday during the shareholders meeting.

Kim’s reappointment requires more than half of the votes by shareholders present at the meeting, and the votes in favor have to account for over one-fourth of the entire voting rights given to all shareholders.

If Kim manages to stay in his post next week, he would mark the third of its kind to serve more than two terms, following Ra Eung-chan, former chairman of Shinhan Financial Group who served four terms, and Kim Seung-yu, former chairman of Hana Financial Group who served three terms until 2012.

Kim Jung-tai, the successor of Kim Seung-yu, appears to be set for a bumpy road to reinstatement, in part due to heightening pressure from financial watchdogs on Hana Financial Group and its key subsidiary KEB Hana Bank.

Earlier this year, Hana Financial Group and financial oversight authorities had been at odds over the start of Kim’s third term.

Hana Financial Group’s chairman nomination committee refused in January to delay the shortlisting of candidates as demanded by the regulator, which had cited ongoing probes into doubtful loans to an individual or an entity found to be in connection with a corruption scandal involving ex-President Park Geun-hye.

Following the refusal, Choe Heung-sik, then-governor of the Financial Supervisory Service, blasted the banking group’s committee for “not acknowledging the authority of the watchdog.”

Choe on Monday offered to resign on allegations of inappropriately engaging in the recruitment process during his stint in 2013 as a chief executive of Hana Financial Group.

Choe said he had not manipulated the scores of an entrance test and all he did was to pass on the name of an applicant who had personal ties with him to a team in charge of recruitment. Choe’s term was terminated Tuesday with presidential approval.

Earlier on Tuesday, the FSS embarked on a probe into Hana Financial Group and KEB Hana Bank by its in-house counsel team to look into misconduct in hiring entry-level employees in 2013.

Financial Services Commission Chairman Choi Jong-ku backed the move by the FSS to target Hana Financial Group and its bank arm in a press conference Wednesday, saying the banking group was the only one with clear evidence of recruitment misdeeds.

Moreover, Choi in parliament on Tuesday alluded to the banking group’s possible tip-off, adding the source of news reports prior to this week centering on allegations involving Choe would be “hard to get” otherwise.

The FSS is an agency devoted to monitoring private financial firms under the oversight of the FSC, the nation’s top financial regulatory body.

On the other hand, Hana Financial Group’s labor union on Wednesday called for an investigation into the hiring process of Chairman Kim’s nephew in 2004 and younger brother in 2006.

Hana Financial Group denied the allegation in a press release, saying the two were hired in a normal process and Kim did not have authorization to engage in a recruitment process when they were hired.

By Son Ji-hyoung