By Kim Yon-se
Regulatory sanctions against Hyundai Capital and the National Agricultural Cooperative Federation, or Nonghyup, are imminent, officials of the Financial Supervisory Service said Wednesday.
The two financial companies have come under intensive regulatory investigations for incurring a critical glitch in their network systems and leaking customer information in April.
A key issue is whether the FSS will take tough punitive action on the two financial companies’ chiefs ― Hyundai Capital CEO Ted Chung and Nonghyup chairman Choi Won-byung ― aside from the coming sanctions on the companies.
“Irrespective of the high possibility that the two companies could be subject to regulatory warning for their negligent internal control, there is still uncertainty over sanctions on their heads,” an FSS official said.
He said the FSS is in the final stages of fine-tuning the extent and severity of the sanctions and the result is expected to be unveiled within about two weeks.
Another official said he expects that the Sanction Review Committee will simultaneously reprimand the two companies in the meeting slated for Sept. 8.
Regulators issue five levels of sanctions against staff of financial companies ― caution (the lightest), cautionary warning, censure-level warning, suspending duties, and requesting dismissal (the heaviest).
If Chung of Hyundai Capital and Choi of Nonghyup are slapped with sanctions of the third-step of censure-level warning, they would be subject to a three-year employment ban.
Should the sanction reach the fourth level ― suspending duties ― they will be barred from holding an executive-level post at a financial company for four years.
Meanwhile, there has been speculation that the two chiefs will be excluded from the pending sanctions or will merely be issued light penalties such as caution or cautionary warning.
In addition, there is also feasibility that the FSS will issue a warning on finance-related business sections of Nonghyup and call for the Agriculture Ministry also to probe the company’s non-financial business.
Instead of penalizing chairman Choi, the regulator could warn Nonghyup’s credit business chief Kim Tae-young, financial industry sources predicted.
The FSS said it discovered that personal information of about 1.75 million customers of Hyundai Capital, jointly controlled by auto giant Hyundai Motor Group and U.S.-based GE Capital, was leaked due to cyber attacks.
The prosecution said in May that North Korea masterminded the cyber attack on Nonghyup which paralyzed its online settlement and transaction systems.
Though the FSS had pledged to conduct tougher oversight of electronic financing, incidents and accidents occurred steadily, including a similar case at Hyundai Securities in June.
Regulators said they conducted an IT security inspection into all financial service companies during the first half.
A task force aimed at bolstering the security of the information technology sector in the financial industry has been formed.
(kys@heraldcorp.com)