Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
Woori's privatization plan hits snag amid leadership crisis
By Kim Bo-eun
By Kim Bo-eun
Uncertainties are growing over Woori Financial Group's privatization plan, due to its falling share price amid a leadership crisis.
The financial authorities last year stated that the Korea Deposit Insurance Corp. (KDIC) would sell its 17.25 percent stake in the financial holding company over three years beginning in 2020.
The state-run agency holds ownership of the banking group, as government funds were poured in to save the lender during the Asian Financial Crisis in 1997. Other shareholders include the National Pension Service (8.37 percent), the employee stock ownership association (6.39 percent) and IMM Private Equity (5.98 percent).
Of the 12.8 trillion won in funds pumped into the bank, 11.1 trillion won has been collected back.
Based on calculations, Woori's price per share needs to be above 13,000 won, for the government to be able to collect the remaining amount at 1997 prices.
Woori's share price stood at 16,000 won Feb. 14, 2019, after the bank's holding company was launched a month earlier, but the price has been on a downward trend over the past year.
The price hovered at around 14,000 won when the financial authorities unveiled the plan to sell its shares in Woori.
But since then the price has dropped considerably over two events ― the scandal involving the bank's mis-selling of high-risk investment options that surfaced in August, and the imposition of sanctions on the group's chief Son Tae-seung over the incident.
Woori's share price hit an all-time low of 10,000 won Feb. 3, when the Financial Supervisory Service finalized its punishment of Son.
It remains unclear when the price will rise, as Woori faces a leadership crisis that won't likely be resolved soon.
A KDIC official said, "The share price is not the only factor that is considered, as the government is seeking to swiftly privatize Woori."
But he acknowledged that the latter won't take priority if the price is too low.
"If there is too much of a disparity, the decision to sell shares cannot be made rashly," he said. "As of now there is a lot of uncertainty."
The group had intended for Son to serve a second term as chairman, with the appointment to be finalized at a general shareholders' meeting in March.
But the punitive measures imposed on the group chief by the financial authorities ban him from serving positions in the financial sector for three years.
While the punishment for Son has been finalized by the Financial Services Commission (FSC), it has yet to place sanctions on Woori as a financial institution.
Woori's board said Thursday Son will keep his position until the FSC reaches a decision on these and notifies the group.
In previous cases, most figures in leadership positions who were punished by the financial authorities' sanctions, stepped down.
For Woori, the issue is complicated because the group does not have a replacement for Son.
But Son keeping his position by taking legal action may anger the financial authorities, which the group needs to work with on a number of issues.
These include suspicions the lender faces of mis-selling investment options managed by the troubled Lime Asset Management, which is expected to incur major losses for investors.
The group also needs approval from the authorities in carrying out M&As, which Woori has set as a key task for this year.