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-FSS feud deepening over DLF case
The Financial Supervisory Services' headquarters on Yeouido, Seoul, left, and Woori Financial Group's headquarters in central Seoul / Korea Times file
By Kim Bo-eun
Financial group fights back against financial authorities' sanctions
By Kim Bo-eun
Woori Financial Group plans to fight punitive measures imposed on its chairman Son Tae-seung for the mis-selling of derivative-linked funds (DLF) that caused major losses for investors last year.
The Financial Supervisory Service (FSS) finalized the sanction for Son last week, which bans him from serving positions in the finance sector for three years. The measure bans Son from serving a second term as the Woori group's chief, which was set to be approved at a shareholders meeting next month.
However, Woori's board implied last week the group will take legal action against the measure. It said Son will keep his position until financial authorities officially notify the group of the sanction. The board was stating it has no intention to support Son stepping down and understands that a suit is inevitable if Son wishes to keep his position.
Bank officials declined to comment on the issue, Monday, but sources confirmed the group is considering an administrative suit and an injunction that would render the sanction ineffective.
This move illustrates the degree to which the group is relying on Son to drive Woori's growth. Son, who previously oversaw the bank's overseas business, pledged to boost Woori's business abroad, and scale up the group's portfolio through active M&As. Woori does not have an adequate replacement for Son, which is why the group is seeking to wage war with financial authorities, despite the risks this bears.
Meanwhile, the FSS confirmed Monday its sanctions review committee will look over Woori Bank's case that involved employees tampering with the personal identification numbers (PINs) of customer accounts in 2018. This was done amid sales pressure, as PIN number changes to accounts void of transactions were counted as new customer transactions. The issue surfaced last week, after local media reports.
According to Woori, the bank reported the matter and immediately took corrective measures to prevent such cases from recurring, when the FSS investigated the bank in October 2018.
“As far as I know, the case was closed at the time. I do not know if the FSS decided to take further action since then,” an official said.
Suspicions were raised that the FSS decided to take action against the bank after media reports criticized the agency for remaining “silent” about the case for over a year. There are also views that this is an attempt by financial authorities to “tame” Woori, following its decision to go against sanctions dethroning Son.
The FSS denied both claims. “It takes about a year for an inspection to be conducted and then for legal aspects to be examined. We drew up measures against the bank toward the end of last year,” an official said.
He explained the matter was pushed aside, as the FSS had to deal with the “DLF case” involving the bank's mis-selling of investment options.
“The FSS has looked into the legal aspects of the case, as changing PIN numbers may qualify as 'manipulating data,'” the official said.
If the authority reaches this conclusion, Woori’s chairman may face additional sanctions.