Woori's reshuffle plan hit by leadership crisis

By Lee Min-hyung

Woori Financial Group Chairman Son Tae-seung.

Woori Financial Group has delayed appointing the next leader of its banking unit in the face of a leadership crisis surrounding incumbent chief Son Tae-seung, the group's CEO recommendation committee said Friday.

The decision came a day after the Financial Supervisory Service (FSS) slapped Son with a reprimand and a warning, holding him responsible for the bank's recent involvement in the mis-selling of financial derivative options and derivative linked funds (DLFs).

With Son's fate up in the air, the group said it would reschedule a decision on the appointment, but did not offer any timeline.

“The committee decided to reopen discussions on the appointment to reflect the recent change (from the FSS decision),” a committee official said.

The group did not share any other details. The company is expected to hold further talks on filling the vacancy Son might leave.

The group was supposed to announce the final candidate for the Woori Bank chief, Jan. 29, but the committee's hours-long discussion failed to generate an outcome. With the regulator slapping on the punishment the following day, the committee had to reschedule its meeting.

Because Son has had a dual role as leader of Woori Financial Group and Woori Bank and finishes his term in March, the committee planned to finish naming the head of the bank no later than the end of this month. In December, the group decided to recommend Son as the sole candidate as chairman and name a new banking chief.

Before the FSS decision, Son was expected to extend his term by receiving approval at the bank's regular shareholders' meeting in March.

But with the top financial regulator handing down the sanction, Son's chances of being retained for another term have become murkier.

Once FSS Governor Yoon Suk-heun signs off on the punishment, it goes into a legal effect and Son has to leave the post.

It remains unknown whether Woori will appeal the FSS decision; but the disciplinary action from the regulator will remain in place regardless of the result of this.

The committee of the financial holding firm shortlisted three candidates ― Woori Bank Vice President Kim Jung-gi, Woori FIS CEO Lee Dong-yeon and Korean Federation of Community Credit Cooperatives' credit unit chief Kwon Kwang-seok ― Tuesday to lead its flagship unit.

Expectations were that Kim would be picked as the sole candidate for the position, as he was known to have Son's strong support.

Kim started his banking career at the then-Commercial Bank of Korea in 1989 and has since been placed in major posts, such as strategy planning, sales and human resources. The bank merged with the former Hanil Bank in 1990 to establish Hanvit Bank. It changed its name to Woori Bank in 2002.

Meanwhile, Hana Financial Group was also hit hard by the so-called DLF fiasco. Vice Chairman Ham Young-joo was also scheduled to take on the chairmanship in March 2021 after ending his term at the end of this year.

But with Ham slapped with the same punishment from the FSS, his future is also uncertain.