Nearly in the bag
Woori Chairman Lee Pal-seung favored for unprecedented 2nd term
By Kim Tong-hyung
Lee Pal-seung looks likely to secure a second term as head of Woori Financial Holdings with Kang Man-soo declining to run for chairman.
Chairman Lee, whose current term ends in March, is among four applicants for the three-year job at the management helm of state-run Woori Financial Group. The competition for Woori’s top post has generated as much talk about those who are in play as those who aren’t.
Former Finance Minister Kang, President Lee Myung-bak’s closest but most controversial aide, has been linked to virtually every major banking job available. But he was a no-show in the Woori race, much to the dismay of headline-driven news editors.
Lee is up against Kim Woo-suk, former CEO of Korea Asset Management Corp., and Kim Eun-sang, vice chairman of accounting firm, Samjong KPMG. It’s essentially a three-man competition, as the remaining applicant is an unidentified 36-year-old who may or may not be serious about his bid.
Lee is heavily favored, although Kim Woo-suk, has built up an impressive resume as the Finance Minister before taking a three-year term as the head of Korea Asset Management Corp. in 2005.
Woori’s chairman recommendation committee will nominate one candidate among the four by the end of this month. Once approved by the company’s board, which is meeting on March 4, the nominee can be named as the new chairman after a shareholders’ meeting on March 25.
If Lee wins a second term it will end a streak of one-and-done chairmen at Woori that began in 2001 after a series of consolidation measures in the banking industry. The Woori Financial Group consists of Woori Bank, Woori Investment and Securities and two provincial banks.
``With Kang out of the picture, this is certainly Lee’s race to lose. It’s hard to imagine him failing to secure another term, although Kim Woo-suk, with his wealth of experience at the finance ministry, looks like the dark horse here,’’ said a source close to the selection process.
Lee has been credited for his role in adding pace to the privatization process of Woori, which has been dragged along over a decade by half-enthused policymakers.
After bailing out Woori during the Asian financial crisis of the late 1990s, the government has struggled to find buyers for its 57 percent stake in the group.
The government was forced to halt the sales process last December despite receiving 11 initial bids. The two lead bidders, one consisting of Woori employees and the other corporate clients, pulled out citing the high premium sought by the government.
Since then, Woori’s management had been suggesting new potential ways for the government to sell the shares. Ideas include sales to citizens or allowing an oligopoly of shareholders instead of waiting for someone to buy a majority stake.
The recent letdown is still an improvement on previous years when the attempts to privatize Woori had been vague before Lee began pushing the issue. The sentiment at Woori, at least among management, seems to be that the group will benefit from Lee putting the sale process back on track and getting a chance to finish what he started.
Privatization is crucial for the growth of Woori, company officials say. They have expressed frustration over their restricted freedom in business decisions under the heavy-handed rule of the state-run Korea Deposit Insurance Corp. (KDIC), which holds the government stake in Woori.
This also makes it tougher for the group to motivate employees and secure talented staff. Although Woori Bank weathered the economic downturn, posting more than 1 trillion won (about $900 million) in net profit annually for the past two years, the management froze employee wages for the sixth consecutive year in 2010.
Although Lee is favored to get another shot at completing Woori’s privatization, it remains to be seen whether he will have a different right-hand man. After nominating the chairman candidate, the group will start the process to name the next CEO for Woori Bank.