By Kim Jae-won
Unionized workers of the Korea Exchange Bank (KEB) together with certain executives have expressed their opposition to Hana Financial Group’s acquisition of a controlling stake in the lender from Lone Star Funds.
Hana Financial Chairman Kim Seung-yu signed the $4.1 billion deal with Lone Star Chairman John Grayken to buy the Texan private equity firm’s 51.02 percent interest in KEB in London last week. However, news of the deal is boosting KEB employees’ opposition.
Hundreds of personal memos containing individual workers’ opposition are plastered on the wall inside the KEB headquarters in downtown Seoul, Thursday.
“I hate Hana Bank so much!” says one unnamed memo on the wall.
Another pointed out Hana Financial’s low profitability that will spread to KEB. “Your KEB buyout is preposterous considering your low profit!”
Hana Bank, the flagship unit of Hana Financial is far behind KEB in terms of profitability and financial soundness, although its asset size makes it the fourth largest above KEB.
Flagship Hana Bank’s net income reached 266.5 billion won in the third quarter, while KEB reported net profit of 290 billion won over the same period.
A senior KEB manager said employees of the fifth-largest lender are afraid of their unclear future under Hana Financial’s management.
“I cannot trust Kim for fair treatment,” the senior manager who works at the headquarters said on condition of anonymity.
“Hana has grown on merging other lenders, such as Seoul Bank, Chungchong Bank and Boram Bank, but employees from the acquired lenders have been discriminated against."
Seoul Bank was merged into Hana Bank in December 2002, while Chungchong and Boram were acquired by Hana in 1998 and 1999, respectively.
The KEB labor union plans to demonstrate against the takeover, which the union expects about 8,000 employees to join at Yeouido, Seoul, Sunday.
The union stepped up protests against Hana’s takeover, claiming that it could lead to another “winner’s curse,” similar to the one Kumho Asiana Group suffered due to the acquisition of Daewoo Engineering & Construction.
The union rallied at the headquarters of the Financial Services Commission to adopt a resolution calling for an explanation on suspicions associated with the KEB deal since Nov. 22. They also have staged one-man protests at the National Assembly, Hana’s main office and Cheong Wa Dae.