KB Kookmin Bank’s internal feud appeared to intensify as the board of directors and the management once again failed to reach an agreement on plans for replacing the bank’s computer system, a matter that has somehow turned into a power struggle between the bank management and outside directors.

With the government now involved ― the Financial Supervisory Service has decided to speed up its special investigation into corruption regarding the system replacement as the outside directors claim ― it remains to be seen whether the mudslinging will soon stop.

But if the latest turn of events is anything to go by, it seems the two sides are far from calling a truce. In a marathon meeting on Friday, the board of directors turned down the management’s repeated calls to maintain the current computing system running on IBM mainframes.

In April, the bank’s board of directors agreed to switch to the more flexible Unix servers but was met by vehement opposition from the bank’s top brass, headed by president Lee Kun-ho. The bank’s auditor Jung Byung-ki also objected, citing possible system risks.

This has caused the outside directors to believe there may have been a shady deal between the bank and IBM. Claiming innocence, the bank management requested a government investigation on the grounds that, on the contrary, the board may have received favors from operators of the Unix system.

The deepening strife has dealt a hard blow to the bank’s leadership, with the CEO struggling to gain an upper hand in the battle with not only the outside directors, but also the union that has been calling for him to step down.

Further complicating the situation is that the outside directors wanting to switch to Unix are allegedly backed by group chairman Lim Young-rok, meaning the strife is not actually between the bank and the directors, but between the bank and its parent company KB Financial Group.

Meanwhile, it is not just the management suffering from the consequences of the power game.

The board of directors has been hit as well since changing to a new system now appears to be a long way off, or could be annulled altogether, to inflict much damage to the bank.

As both parties have made it clear that they would not back off, many believe the FSS holds the key to the issue.

Results from the FSS probe are to come within this week, according to officials.

It also plans to deliver the final punitive measures ― either to the management officials or to the board of directors ― by early July.

By Bae Hyun-jung (tellme@heraldcorp.com)