Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Legal issues weigh on banking groups ahead of shareholders' meetings
The logo of Shinhan Financial Group, the country's second-biggest financial services provider, is seen at its headquarters in central Seoul, in this photo taken in 2018. Korea Times file
By Yi Whan-woo
By Yi Whan-woo
The legal issues associated with major banking groups are expected to be a key topic at their shareholders' meetings scheduled for next week.
The defeat of Hana Financial Group Vice Chairman Ham Young-joo in an administrative suit over improper selling of high-risk derivative-linked funds (DLFs), Monday, surprised many as Woori Financial Group's Son Tae-seung won a similar DLF case back in August 2021.
Hana Financial Group finds the ruling will hardly influence Ham, the sole candidate for the group's next chairman position, from being confirmed during the shareholders' meeting on March 25.
Some analysts, however, say that concerns remain, noting that the group's two outside directors who sought to extend their term faced objections from 15 percent of the shareholders in their previous meeting in December. The two were involved in the DLF fiasco, as well.
In case of Woori, the Financial Supervisory Service (FSS) has brought Son's case to an appeals court in protest at the previous ruling that revoked the FSS' reprimand warning on him, as a disciplinary measure.
Industry analysts view the FSS' actions can affect four outside directors and a non-executive director whose appointment will need the shareholders' approval, also on March 25.
In 2021, the Korea Teachers Pension, one of the group's shareholders, opposed the appointment of two out of the five previously mentioned figures. It argued that the two were particularly negligent regarding keeping an eye on the group related to the DLF case.
Concerning Shinhan Financial Group, its eight outside directors await approval from the shareholders in the March 24 meeting, to extend their tenure.
The meeting will come amid the ongoing trial of the group's chairman Cho Yong-byung over a hiring scandal, in which, he received a suspended jail term by the lower court in January 2020 but was found not guilty by the appeals court in November 2021.
Additionally, Shinhan Financial Group was sanctioned by the financial authorities over the sale of problematic funds structured by hedge fund firm Lime Asset Management.
Some eight outside directors were blamed for the two separate incidents and faced objections with regards to their approvals in the 2021 shareholders' meeting.