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.
Court suspends punishment on Hana vice chairman
Hana Financial Group Vice Chairman Ham Young-joo / Korea Times file
By Yi Whan-woo
By Yi Whan-woo
An appellate court accepted Hana Financial Group Vice Chairman Ham Young-joo's request to suspend a punishment on him from taking effect, following a lower court's ruling against him on March 14 over a lawsuit concerning the improper selling of high-risk derivative-linked funds (DLFs) by the group's flagship subsidiary Hana Bank.
This decision, made in the lead-up to the trial, ensures Ham receives a 30-day extended grace period before the sanction takes effect. The Financial Supervisory Service (FSS) first issued the reprimand against him in March 2020 over the DLF fiasco, but it was postponed from taking effect after Ham filed a suit against the FSS in June 2020.
Ham wants the sanction revoked completely through his appeal.
“The plaintiff may suffer irrecovable damage if the reprimand is imposed,” Seoul High Court said, Thursday. “Suspending the reprimand therefore is needed immediately to prevent any such damage.”
The court went on to say the suspended disciplinary measure doesn't appear to bring any harm to the public interest.
The upper court's acceptance of Ham's request is interpreted as showing the possibility that the lower court's verdict may be overturned as well.
Hana Financial Group has been stressing that Hana Bank has already compensated affected investors fully.
Legal experts thus expect the high court to approach the case in a practical manner.
Concerning the “unrecoverable damage,” legal experts say Seoul High Court seems to have recognized the risks faced by Ham ahead of a shareholders meeting scheduled for Friday.
Ham, also the nominee for the group's chairman position, awaits confirmation from shareholders, after being tapped for the post on Feb. 8.
The March 14 ruling does not hinder shareholders from making a decision, because their meeting falls within the 30-day grace period that runs until April 13.
The ruling, however, was believed to have confused shareholders in respect to whether it is legally sound to support Ham, as not all of them were aware of such legal procedures.
Ham was the CEO of Hana Bank between July 2018 and May 2019 when several of its branches failed to inform customers of the risks associated with DLFs. In a similar case linked to DLFs, Woori Financial Group Chairman Son Tae-seung was recently found not guilty by the courts.
DLFs are designed to provide high returns when the interest rates of major economies stay above a certain level, but they ended up incurring massive losses for investors as the yields tied to products plunged.