FSC chief vows to privatize Woori

By Kim Tae-jong

FSC Chairman Shin Je-yoon

The head of the nation’s top financial regulator has promised to soon complete the long-pending privatization of Woori Financial Group.

“I understand it is a very difficult task, as we have already failed three times, but I think it’s time to use our last card,” Financial Services Commission (FSC) Chairman Shin Je-yoon told reporters at a dinner Thursday. “I swear on my post that I will complete it. We will have to wait for another five years, if we can’t do it now. I will push forward with it thinking that it is the last mission of my career in public office.”

Woori is the country’s largest financial firm with 325 trillion won in assets. The government injected 12.7 trillion won of taxpayers’ money into the group in the wake of the 1997 financial crisis.

The state-funded group has been put up for sale several times, but its huge asset value, as well as opposition from politicians and civic groups has made it difficult to find a preferred bidder.

Shin also noted there was no fixed plan for the sale of the group, saying the government will take steps favorable to a potential buyer in the market.

In this regard, he mentioned that the idea of a merger of Woori and another big financial group, which will create a so-called mega bank, is just one option in mind.

“It is just one alternative, as we are open to any possible scenarios,” he said, refuting the rumor that he prefers the mega bank option for the privatization of Woori.

There has been some speculation that the FSC may push for the merger of Woori and KB Financial Group, as the latter has greater cash reserves than other domestic competitors.

But Shin emphasized the FSC is considering various options, as a block sale, under which a single investor would take over the group’s entire assets, has many problems.

Shin also said a person who agrees with the privatization of Woori and can step down when needed should be appointed to lead the group, following the offer of resignation by former group Chairman Lee Pal-seung. Lee expressed his willingness to resign before the end of his term, Sunday, amid pressure to step down from the post under the new government.

“I think someone with a philosophy for privatization should take office. The philosophy means a quick sale. What concerns me most is any new chairman who may want to maintain the status quo and be reluctant about the privatization during his or her term.”

Shin also suggested that local financial firms should seek more opportunities in emerging markets rather than developed ones.

“Major local manufacturing firms have their branches in New York and London, but they also operate in Africa or small towns in Brazil, selling refrigerators and cars there. Financial firms should also sell their products (in countries like) in Myanmar,” he said.

Regarding problems from short-selling by speculative investors, he said the FSC has been considering various measures to minimize its negative impact on the market.

“The nation’s short-selling regulations are very strict, but continuous short-selling by speculative investors can have a negative impact on the market, and there is the possibility of unfair trading using the method. So we’re thinking of strengthening rules on posting regulatory filings,” he said.

The remark came as the chairman of the nation’s largest biotech company Celltrion recently announced his decision to sell his entire controlling stake in the firm to a multinational pharmaceutical company to protect it from speculative short-sellers. Chairman Seo Jung-jin strongly blamed the financial authorities for their lack of protection against such attacks by stock price manipulators.