Woori Bank CEO is eligible for second term

By Kang Seung-woo

With the privatization of Woori Financial Group in full swing, Woori Bank CEO Lee Chong-hwi’s reappointment has drawn attention.

Despite two warnings during his career at the lender, the 61-year-old has expressed his desire to stay on. The Korea Deposit Insurance Corp. (KDIC), the largest holder of the financial holding firm, remains cautious on the issue.

“My reappointment is up to the KDIC,” Lee said. “There is a rule stipulating that an executive who receives more than two warnings during a term at a financial institution cannot be reelected. However, each penalty took place at different times, so we need to see if the term tenure means the identical one or not.”

According to the regulation’s of the KDIC, which holds a 56.98 percent stake in the nation’s largest financial services group, an executive who is given two or more warnings is banned from working for financial institutions that have signed a memorandum of understanding (MOU) with the KDIC for the next three years.

Last year, the KDIC issued a three-month suspension of duty to former Woori Bank CEO Hwang Young-key for losses of 1.6 trillion won in derivatives investments, such as Collateralized Debt Obligation (CDO) and Credit Default Swap (CDS), and Lee, then the vice president, received a punitive action for his role in failing to prevent the losses.

Lee, a lifetime banker, was also penalized for overpaying bankers’ incentives in the second quarter of 2006.

The only lifeline for Lee is that there is an exception to the rule, in the case that some changes affecting shareholders’ interest.

Unlike Lee, KDIC, the state-run equity, is keeping things low-key.

“As it is not the right time for personal affairs, we have yet to think about it,” a KDIC official told The Korea Times.

“We will discuss what Lee says at a later time.”

In addition, the KDIC is concerned Lee’s reappointment will hurt its bid to privatize Woori Financial.

“It is not appropriate to decide the fate of management in advance, which will not be favorable to the process of selling Woori,” he said.

After the Asian financial crisis a decade ago, Korea gained control of the group by injecting 12.8 trillion won of public money into five ailing financial companies that were later incorporated into Woori Financial.

The government is trying to recover a total of 5.3 trillion won from funds spent on the bailout by putting the country’s No. 1 financial group up for sale.

우리 금융의 민영화 논의가 본격화 되면서 이종휘 행장의 연임에 대한 관심도 고조되고 있다.

두 번의 경고에도 불구하고 이행장은 연임에 대한 의지를 밝혀왔다.

하지만 우리 금융의 최대 주주인 예금보험공사는 이행장의 연임에 신중한 태도를 보이고 있다.

“대주주인 예금보험공사에서 결정할일” 이라고 이행장은 최근 한 언론과의 인터뷰에서 얘기를 했다.

“예보 경영 정상화 이행관리 규정에 동일 금융회사에서 임기 중 2회이상 징계를 받으면 재선임할 수 없다는 단서조항이 있다. 하지만 한 번은 수석부행장 시절에, 또 한번은 행장 임기 중 받은 것이어서 수석부행장과 행장을 동일한 임기로 봐야하는지는 따져봐야한다고” 밝혔다.