Woori chief set for lawsuit as FSC finalizes sanctions

Woori Financial Group Chairman Son Tae-seung

By Park Jae-hyuk

Woori Financial Group Chairman Son Tae-seung will file administrative litigation against the Financial Supervisory Service (FSS) to prevent its punitive measures against him for the so-called “DLF fiasco” taking effect, the banking group said Wednesday.

At a general meeting Wednesday, the Financial Services Commission (FSC) finalized sanctions against Woori and Hana banks over their failure to prevent major investor losses caused by the mis-selling of high-risk derivative-linked funds (DLFs).

The FSC fined Woori 19.7 billion won ($16 million) and Hana 16.7 billion won, as well as banning them from selling private equity fund options for the next six months.

The regulator also said the Financial Supervisory Service (FSS) will notify the bank executives of the sanctions imposed on them, which restrict them from working at financial companies.

The punishments of the bank executives, which were finalized after approval by FSS Governor Yoon Suk-heun, Feb. 3, will take effect as soon as the executives receive notification.

Woori said its chairman will file for administrative litigation in the capacity of an individual, as soon as he receives the notification, asking the court to dismiss the sanctions.

“Our board of directors had no choice but to make such a decision to stabilize our governance structure,” a Woori Financial Group spokesman said. “This is intended to ask the court about whether the heavy sanction was legitimate or not. We expect the court will make the right decision.”

Woori wants to reappoint Son as chairman at its general shareholder meeting scheduled for March 25.

If the court grants an injunction before then, Son will be able to continue leading the group.

Meanwhile, Hana has remained cautious about the FSC's decision, because it will select its new chairman later this year at the earliest.

Hana Financial Group Vice Chairman Ham Young-joo, heavily sanctioned along with Son, must file litigation within 90 days of receiving official notification, if he intends to lead the group.