Ex-Hana head’s luck running out
It was barely two months ago when Kim Seung-yu looked like a man with nothing left to prove and who appeared at peace with the prospect of going out on a high note.
The long-time chairman of Hana Financial Group was glowing after pulling off the company’s difficult acquisition of the Korea Exchange Bank (KEB) earlier this year in the biggest (M&A) deal in the history of Korean banking.
In absorbing KEB, Hana put itself in a position to compete with bigger rivals like Woori and KB. Kim, 69, who stepped down from the management helm in March, couldn’t have wished for a better retirement present to glorify an illustrious banking career that spanned nearly five decades.
However, it now seems likely that he is destined for a different ending to his life as a public figure, an exit that could leave his reputation and legacy irrevocably tarnished.
Kim, who happens to be a close friend of President Lee Myung-bak, finds himself entangled in a mess created by the country’s toxic secondary banking sector.
Financial authorities have suspended a total of 20 savings banks since last year when they first began the clean-up process and the investigations into the troubled lenders have unveiled a wealth of evidence of bribery, influence peddling and political payoffs in addition to bad management.
There is a strong possibility that the fiasco could explode into a national scandal that blows up in front of Cheong Wa Dae. And Kim could be the match that lights it, should allegations about his murky connections with savings bank owners prove true.
Suspicions regarding Kim surround the head-scratching move by Hana Capital, an unlisted subsidiary of the Hana Group, to invest 14.5 billion won (about $12 million) in the now-suspended Mirae Savings Bank in September. The timing of the spending was odd as Mirae was under close watch by financial authorities who had issued a warning over its financial health.
Investigators are wondering whether Kim took bribes from Kim Chan-kyung, the arrested Mirae owner charged of embezzling more than 500 billion won in corporate wealth. There are also questions involving the ownership of some expensive paintings, including a work by late American artist Cy Twombly and a Seoul building Mirae provided Hana Capital as collateral.
In an interview with media outlets, Kim denied accusations of bribery and malpractice. Investigators have no intention of taking his word for it.
Prosecutors raided Hana Capital’s Seoul office Wednesday and questioned three company executives. They are looking into whether they can charge Kim with breach of trust or bribery, according to the head of the investigation.
``The questioned Hana officials claim Kim didn’t commit a breach of trust as the investment in Mirae didn’t result in financial losses. Obviously, it is our task to confirm whether the investment negatively affected Hana and that’s what we are concentrating on,’’ senior prosecutor Choi Woon-shik said over the telephone.
``And whether or not the investment caused a loss for Hana, it would be a problem if the decision to invest was a personal favor resulting from bribes. Once we manage to secure enough evidence to firmly establish our case, then we will be able to talk about summoning Chairman Kim for questioning.’’