Nonghyup chairman in hot seat
By Kim Tae-gyu
It is an honor to become the head of Nonghyup, Korea’s largest banking group in terms of branches with more than 60,000 employees and around 30 million customers across the country, according to the bank.
Yet, experience tells a totally different story as all three chairpersons have ended up behind bars since the farmers’ bank introduced a direct election system to pick its leader in 1988.
Current head Choi Won-byung is facing his own uphill battle because Nonghyup, otherwise known as the National Agricultural Cooperative Federation, is embroiled in the problems surrounding the unprecedented service disruptions after a system crash.
``There are no reports that Choi violated laws while at the stewardship of Nonghyup.
Accordingly, he might be different from his three immediate predecessors, who faced criminal charges,’’ said a Seoul analyst who asked not to be named.
``However, he will not be able to wrap up his four-year term with great fanfare due to the network crash that damaged the image of Nonghyup. In a sense, the misfortunes of Nonghyup chiefs appear to have repeated themselves.’’
During the waning days of 2007, Choi was narrowly elected to take charge of Nonghyup, which boasts some 5,000 branches and up to 20,000 automatic teller machines.
Choi’s victory caused controversy because he went to the same high school as President Lee Myung-bak, who back then was about to take office after winning the presidential election by a big margin.
Under Choi, Nonghyup faced public pressure to overhaul its lax management as well as complaints that the bank pays little attention to farmers.
In response the outfit with assets of 180 trillion won came up with a set of reforms in early 2009 preventing its chairperson from serving consecutive terms and reducing their power.
Choi’s troubles seem to culminate this month, his final year as chairman after the group’s network shut down on March 12 left its clients unable to take advantage of some banking services for a week.
Financial regulators, the central bank and the prosecution have attempted to get to the bottom of the case so as to figure out who is responsible for the mess. The investigation is still underway.
But the image of Nonghyup has been tainted by customer complaints continuing to attack the company.
``I don’t know how Choi will address all the issues. But one thing I can say for sure is that he will not be remembered as the best Nonghyup chairperson,’’ the anonymous analyst said.
Misfortunes of predecessors
After the launch of the direct election system, Han Ho-sun took the reins of the bank in 1988. Later the charges of embezzlement were brought against him.
His successor Won Churll-hee, who served from 1994 through 1999, was brought up on similar charges and received a jail sentence.
Most outstanding was Chung Dae-kun, who led the organization from 1999 to 2007. He was at the center of a scandal, which involved late former President Roh Moo-hyun’s elder brother, Geon-pyeong.
Chung was first indicted in 2006 for taking bribes from Hyundai Motor Group to sell lands belonging to Nonghyup in southern Seoul at bargain prices.
While behind bars, his name again hit the headlines with regard to Nonghyup’s purchase of Sejong Securities. Geon-pyeong was found to have lobbied Chung to prompt Nonghyup to snap up the ailing brokerage house in a murky buyout deal.
In this climate, even President Lee said of late that the chairmen of Nonghyup and heads of the National Tax Service are the two jobs most vulnerable to the prosecution.
Observers point out that it remains to be seen whether President Lee’s alumnus Choi will become the first directly elected Nonghyup chief, who does not face criminal charges.