Value context and insight. lkm@koreatimes.co.kr
NH NongHyup Financial to conduct intense oversight of investment subsidiary amid reform drive
Headquarters of NH NongHyup Bank in Seoul / Courtesy of NH NongHyup Financial Group
By Lee Kyung-min
NH NongHyup Financial Group will conduct a thorough oversight into its investment subsidiary, NH Investment & Securities, in a first step to strengthen compliance across the group affiliates, the company said Wednesday.
The two-week inspection scheduled from Nov. 24 to Dec. 5 will identify questionable employee conduct amid months of controversies involving misuse of undisclosed information for personal gains and falsifying official filings during initial public offerings (IPOs).
NH NongHyup plans to strengthen monitoring systems, providing grounds for sanctions that would essentially bar perpetrators from continuing careers in the financial sector.
NH NongHyup Financial Group Chairman Lee Chan-woo / Courtesy of NH NongHyup Financial
The drive spearheaded by Chairman Lee Chan-woo seeks to restore the lost trust of the public, recently amplified by the head of the National Agricultural Cooperative Federation (NACF), the group’s parent firm, involved in bribery allegations.
“We will hire two law firms with extensive experience in financial regulation and compliance to redefine internal control,” NH NongHyup Financial Group chairman said.
NACF Chairman Kang Ho-dong is suspected of having received 100 million won ($681,000) from the head of a firm doing business with NongHyup affiliates in January 2024.
Police said the cash was in exchange for favors related to contract deals with the NACF, adding that Kang will soon be summoned for questioning.
Earlier in July, the investment subsidiary’s headquarters was raided over allegations that a senior investment banking division executive used non-public tender offer information to net about 2 billion won in undue gains.
The executive allegedly shared details on 11 tender offers with his acquaintances and relatives before information became public, allowing them to profit as well.
In April, another employee was questioned for allegedly using non-public information during a tender offer made by Korea Zinc.
NH Investment & Securities is also facing allegations over falsified securities filings during the 2023 IPO of PADU, a Kosdaq-listed tech firm.
A group of investors later filed a damage suit against the company over PADU’s overvaluation issues leading to stock price fall.
The securities firm posted 391.9 billion won in operating profit and 283.1 billion won in net profit in the third quarter, up 107.9 percent and 83.8 percent, respectively, from a year earlier.
In 2024, its operating profit came to 901 billion won, while net profit stood at 686.6 billion won.