Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Woori Financial chairman wins lawsuit against watchdog
Woori Financial Group Chairman Son Tae-seung / Yonhap
By Lee Min-hyung
By Lee Min-hyung
Woori Financial Group Chairman Son Tae-seung has won an administrative lawsuit against the Financial Supervisory Services (FSS) over the latter's decision to slap a reprimand warning on the Woori chief by holding him responsible for its involvement in the misselling of risky derivative-linked funds (DLF).
The Seoul Administrative Court ruled Friday to revoke the reprimand warning that the FSS had slapped on Son. The reprimand is classified as a heavy sanction, and any financial leaders who receive such a sanction are not allowed to extend their terms, nor can they work at other financial institutions for three years.
The latest ruling may clear away Woori's leadership risks, to some extent, and will affect similar sanctions that the FSS slapped on leaders of other financial firms. Hana Financial Group Vice Chairman Ham Young-joo has also filed a lawsuit against the watchdog after receiving a reprimand for the DLF scandal.
“We humbly accept the judgment from the court and the latest ruling,” a spokesman of Woori Financial Group said. “We have sincerely pushed for a set of measures to regain trust from customers, by immediately accepting the dispute settlement recommendations from the FSS after the incident.”
“Woori will tighten our internal supervision, and actively cooperate with watchdogs' policies on protecting customers in the financial circle,” the official said.
But as there still stands a chance for the FSS to lodge an appeal, the Woori chief is expected to keep a low profile until the final court ruling.
Early last year, the FSS handed down the sanction against Son, taking issue with his “weak internal supervision” over Woori Bank's misselling of DLFs. But Woori Financial Group and Son have claimed it is realistically impossible for the leader to supervise every single sales activity made by its subsidiaries.
Son, however, is still facing another heavy sanction for Woori Bank's involvement in sales of troubled funds linked to Lime Asset Management. A final decision by the Financial Services Commission has not been made on this issue. All eyes are on whether the latest ruling will be able to help mitigate the penalty against Son in the Lime case.
The Woori chief will be able to seek another term in March 2023, only if the sanctions are mitigated.