By Kang Seung-woo
The government is making a last-ditch effort to keep the Woori Financial sale alive, and is set to stick to a plan to ease requirements for local banking groups to boost interest from bidders.
The Financial Services Commission (FSC) said Sunday it will push for a revision of the financial holding company regulations until Wednesday, the deadline for letters of intent to purchase the government’s 56.97 percent stake in the nation’s largest banking group by assets.
“The FSC will drive to soften ownership rules until Wednesday,” said a high-ranking official with the organization.
“The financial regulator is trying to get approval from the National Assembly in its efforts to relax the rules by that time.”
On May 30, the FSC came up with the plan to lower the barrier for financial holding groups to participate in the Woori bid.
The existing rules require a financial holding company to acquire at least 95 percent of the target holding company in consolidating their businesses, but a proposed revision would reduce the requirement to 50 percent if the target is a financial holding company that has been bailed out with taxpayers’ money.
However, the FSC’s amendment drive has come under siege as lawmakers and observers strongly rejected the plan, saying it will only pave the way for state-owned Korea Development Bank Financial (KDB) to utilize public finance in order to take over another state-run financial institution.
As a last resort, FSC Vice Chairman Shin Je-yoon was quoted by lawmakers as saying in the National Assembly that the FSC will drop the move to revise regulations if legislators keep opposing it.
“If the plan to relax ownership rules fails to gain approval from the National Assembly, the FSC will not continue to pursue it,” the official said.
The Public Fund Oversight Committee (PFOC), a public-private organization overseeing the Woori sale, is poised to go ahead with the long-awaited privatization of Woori despite the possible failure to revive the ownership requirements, which may put the sale at stake.
“There is speculation that the committee may stop the sale of Woori Financial, but we have never sought ways to do this,” said a PFOC official.
However, the PFOC said that a block sale or piecemeal sale were not on the cards.
The outcome of the second attempt at Woori privatization seems to be up in the air, with few hopefuls on the wish list. The FSC failed to auction off the stake in December last year due to the absence of a valid bidder.
The FSC and its Chairman Kim Seok-dong disqualified KDB, seen as the favorite, from the bidding war two weeks ago following low public approval.