By Oh Young-jin
Will Hana Financial Chairman Kim Seungyu want the fourth term after his third term expires in March?
This question is relevant because his decision will have a sizable impact not just on Hana’s consolidation with the Korea Exchange Bank (KEB), which finally received regulatory approval last week but also on the governance of Korea’s banking industry.
Kim kept his cards close to his chest, while indicating he had asked the “management improvement committee” to make a recommendation about who is suitable to be the “next Hana chief” during a news conference following the government’s approval of Hana’s KEB acquisition.
It remains uncertain whether he has ruled himself out of the running.
The committee is composed of Kim and four other members who are close to him, raising questions about whether it would recommend anyone else.
“The committee members are trying to persuade Kim to take another term,” a Hana official told The Korea Times. “We should let Kim finish what he started.” He led the efforts to acquire KEB in order to attain an “economy of scale” to compete with the three big banking groups of Kookmin, Woori and Shinhan, after he signed a deal with Lone Star Chairman John Grayken during a secret trip to London in November 2010.
Hana plans to deposit the sum excluding taxes from their agreed price of 3.91 trillion won this week, enabling it to measure up to the big three, an achievement that the Hana official said qualifies Kim for another term.
Hana’s internal regulations have it that one may not seek to be CEO after 70, meaning that Kim, if he wins a fourth term, will be able to serve until the end of 2013.
There is already a rumor that Kim will act as if he has succumbed to the committee’s strong recommendation for him as the sole candidate and reluctantly accept it.
There appears to be a consensus in the Hana leadership that there are a number of challenging tasks ahead that will require his continued leadership. They include the integration of KEB into the Hana system and handling an expected political backlash from the opposition parties, whipped up by capricious election- year politics.
Kim said that KEB will be independently managed for a while as part of efforts to appease the KEB union, which has vowed to stage an all-out struggle against Hana. The main opposition Democratic United Party is also attacking the government for allowing the deal that let the Texas-based private equity fund leave with 4.7 trillion won, more than twice their initial investment.
Kim’s continued reign is not universally welcomed, however.
Above all, his “advanced” age raises questions about the wisdom of his leadership, giving his foes fodder to compare him with Ra Ung-chan, the Shinhan chairman, who was ousted in a power struggle triggered by his efforts to extend his term.
The close ties he has with President Lee Myung-bak also loom large.
“I wouldn’t be surprised if Kim is hesitant to take a second term,” an industry watcher said.
“If he stays on, the likelihood is that he will be embroiled in a witch hunt in the lead up to April’s general election and the presidential election in December and it will continue even after Lee leaves office.
“It’s time to put himself at an arm’s length from what will happen,” he added.
Hana is scheduled to hold a directors’ meeting on Feb. 9 during which more light will likely be shed on Kim’s future.