KDB chief confident about Korean Air's acquisition of Asiana

Korean Development Bank (KDB) Chairman Kang Seog-hoon speaks during a press conference at its headquarters in Yeouido, Seoul, Tuesday. Yonhap

Chairman still at odds with labor union over relocation to Busan

By Lee Yeon-woo

Korean Development Bank (KDB) Chairman Kang Seog-hoon expressed confidence over Korean Air's acquisition of Asiana Airlines, Tuesday, stressing that he does not consider a “Plan B,” in preparation for failure, at all necessary.

“We expect the merger to be concluded during the third quarter of this year,” Kang said during a press conference marking the first anniversary of his term. “This is not the time to prepare for failure. This is the time to put in all of our effort.”

Speaking to reporters at its headquarters in Yeouido, Seoul, Kang noted that the acquisition has been his main focus since Hanwha Group took over Daewoo Shipbuilding & Marine Engineering (DSME) this year. His efforts have included meetings with the European Union's authorities in January and the U.S. Department of Justice (DOJ) in May.

So far, the acquisition has obtained approval from 10 countries and is currently awaiting approval from the U.S., the European Union and Japan, according to the bank.

Kang then highlighted KDB's achievements under his leadership during the past year.

“Last January, the United Arab Emirates (UAE) announced its plans to invest $30 billion in Korea. Just four months later, KDB shaped up the bilateral partnership, signed with UAE's Mubadala Investment Company. We also identified six sectors for investments and discovered additional opportunities worth $2 billion,” Kang said.

“We will announce the specific investment plans as soon as they are finalized,” Kang added.

Additionally, Kang commended KDB's swift response to default in project financing (PF) for the construction of a Legoland amusement park in Gangwon Province last October and its support in venture businesses. The success to privatize DSME by Hanwa Group was also highlighted as an achievement.

However, long-pending issues that were present even before his inauguration remain, suggesting another challenging year ahead.

The chairman is still in dispute with unionized members who oppose the bank's potential relocation to Busan, a promise made by President Yoon Suk Yeol during his presidential campaign.

Unionized members of KDB argue that relocating to certain regions contradicts the bank's role in utilizing policy finance. To date, 97 employees left the state lender in 2022 and 37 departed in May 2023. In statements distributed to the reporters, members claimed that the chairman has been avoiding communication.

Kang refuted such allegations saying, “I have done my utmost to communicate with employees. As chairman of KDB, I aim to discuss how we can use this government's relocation plan to the benefit of KDB. However, employees are requesting that I oppose the relocation before we can communicate. I do not have the authority, nor am I in the position to oppose the plan.”

Regarding concerns over its financial solvency, sparked by mounting losses of Korea Electric Power Corp. (KEPCO), Kang acknowledged that KDB's financial structure is vulnerable to external variables. He stated that KDB will continue to engage in discussions with the government on this matter.