 |  |  |
Shin Je-yoon | Choi Soo-hyun | Yim Young-rok |
By Chung Ah-young
Top regulators are unlikely to avoid responsibility for allowing internal fighting within the management of the KB Financial Group to drag on so long and damage its corporate image, analysts said Thursday.
Baek Ehung-gi, a professor in the department of finance and economy at Sangmyung University, said that both chiefs of the Financial Supervisory Service (FSS) and the Financial Supervisory Commission (FSC) are drawing criticism for their failure in properly preventing the financial mishap beforehand.
"The FSS and FSC have failed to function in their supervisory roles in this case. They have moved in accordance with political logic rather than by the rules. KB's irregularities also highlight the financial authorities' incompetency, which led to the extreme chaos," he said.
Some media outlets reported that Cheong Wa Dae is planning to sack FSS Governor Choi Soo-hyun for mismanaging the scandal. However, the presidential office denied this.
Analysts said that uncertainty surrounding management still remains as an obstacle for KB Financial Group in the market.
They agreed that the KB crisis dealt a severe blow to the corporate image of the nation's biggest financial group by assets, which lost credibility for its management structure.
Shares of KB Financial closed at 39,800 won on Thursday, down 0.5 percent. The benchmark KOSPI fell 0.72 percent.
The board of KB Financial agreed Wednesday to dismiss Lim Young-rok, its chairman, after the FSC, headed by Shin Je-yoon, suspended him for three months for mismanagement over a computer system change at KB Financial's bank unit on Sept. 12.
Previously, the FSS's disciplinary review committee slapped cautionary warnings on Lim and Kookmin Bank CEO Lee Kun-ho on Aug. 22. But FSS Governor Choi overturned the decisions and upgraded the penalty to punitive warnings on Sept. 4.
Kim Jae-seung, an analyst at KDB Dawoo Securities, said that the management crisis was already reflected in the share price since the FSS slapped a punitive warning on Lim, but the drop was not that big.
"The KB crisis has just hit the peak. So we think KB will take this opportunity to renovate its management system. It will help KB recover its tarnished image," he said. "But uncertainly still lingers because we don't know who will replace Lim."
Jason Choi, an analyst at Woori Investment and Securities, said that it will not hurt its fundamentals, but if the leadership vacuum continues it will affect the price, raising concerns about its business.
All eyes are fixed on the movement of foreign shareholders with a 67.3 percent stake as of Thursday. But analysts said that they will not be affected by this isolated incident as they invest for the long term and because of KB's strong fundamentals.
"They are long-term investors. Foreigners began buying the shares which were priced at 30,000 won or so. So their investment loss has been not that big, even though the share prices fell slightly," Kim said.
![[PHOTOS] World Cup 2022 France vs Poland](https://img.koreatimes.co.kr/upload/thumbnailV2/2_2310181639ad8.jpg/dims/resize/178/optimize)
![[INTERVIEW] GOT7's Jinyoung on playing twins in 'Christmas Carol'](https://img.koreatimes.co.kr/upload/thumbnailV2/edc2131fbb0b4ac3bfd6c46d6a7e959c.jpg/dims/resize/178/optimize)
![[PHOTOS] World Cup 2022 France vs Poland](https://img.koreatimes.co.kr/upload/thumbnailV2/2_2310181639ad8.jpg/dims/resize/268/optimize)
