Chairman may seek term extension or hold other post to resolve KEB takeover


Hana Financial Group has remained undecided as to whether to replace or retain incumbent chairman Kim Seung-yu.

Kim, whose term expires this March, has expressed his intention to resign. But group spokespeople did not rule out the possibility that his term will be extended.

“Outside directors said they will persuade chairman Kim to serve one more term by one year,” a Hana Financial spokesman said Thursday.

“Nothing has yet to be decided. It (his fate) will likely be confirmed at the end of February,” he said.

Kim has been in charge of the post of Hana Bank CEO or Hana Financial chairman since 1997.

According to market observers, the 68-year-old chief could enjoy the top post by winning a series of bidding competitions to take over distressed banks.

Hana Financial, which had acquired Boram Bank, Seoul Bank and Chungcheong Bank, recently obtained regulatory approval to take over Korea Exchange Bank.

To successfully acquire KEB by paying money to U.S. Lone Star Funds, his tenure extension is necessary, according to Hana Financial executives.

In particular, a key issue is resolving the backlash from KEB unionized workers and a group of lawmakers over the Financial Services Commission’s endorsement of the Hana-Lone Star deal.

The protestors argue that the U.S. fund has been ineligible to own KEB, making the deal with Hana invalid.

As a series of lawsuits and complaints against the FSC have already been filed with courts and the prosecution, uncertainties persist despite the regulator’s approval of the deal.

“A new chairman could face a variety of difficulties from the external factors,” a banking research analyst said.

Some raised the possibility that Kim could hold the post of honorary chairman or senior adviser.

Kim has pledged to ensure the job security of about 8,000 KEB employees.

During a news conference, Kim downplayed the possibility that Hana will conduct a massive manpower restructuring after the merger.

Meanwhile, Hana spokespeople dismissed the speculation that Hana Bank CEO Kim Jung-tae will be appointed as Hana Financial chairman.

The Korean Financial Industry Union has speculated that Hana made a behind-the-scenes contract with Lone Star under which the acquirer will pay the fund’s taxes on capital gains from the sale of KEB in the form of withholding taxes.

A Hana spokesman denied the allegation, adding there was no undisclosed deal between the two sides.

By Kim Yon-se (kys@heraldcorp.com)