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Government may intervene in management through pension service
Foreign investors are leaving Hana Financial Group by disposing of their stake amid uncertainties from the group’s takeover of Korea Exchange Bank.
Following the departure of Temasek Holdings in October, Goldman Sachs sold off its entire stake in Hana Financial on Tuesday.
At the end of June 2011, Temasek, an equity fund controlled by the Singapore government, and Goldman, a global investment bank, were the largest and second-largest shareholders with 9.62 and 8.66 percent stakes, respectively.
There is a possibility that other foreign shareholders including AllianceBernstein, a New York-based investment fund, will join the move, according to financial industry sources.
“Due to Hana Financial’s payment of KEB takeover funds to Lone Star, the group will have no choice but to slash its dividends to shareholders,” an official of the Financial Supervisory Service said.
He cited uncertainties over Hana’s future profitability and stock prices for their exits.
“Further, the KEB union may stage an all-out strike according to the coming situation.”
Most of all, the funds originally were not interested in long-term investment, the official added.
An analyst commented on Hana Financial having to pay strategic investors who participate in the group’s acquisition of KEB a certain level of premiums.
As a result, the National Pension Service, then third-largest shareholder, has been the biggest shareholder of Hana Financial.
The state-run NPS is reportedly poised to dispatch an outside director to Hana Financial.
The situation is inviting speculation that policymakers such as the Financial Services Commission and the Finance Ministry will intervene in management of the group.
While Hana chairman Kim Seung-yu expressed his willingness to resign, a personnel reshuffle for the group’s senior posts is inevitable.
Yun Yong-ro, a former senior financial regulatory official from the FSC, has been appointed to CEO of KEB and vice chairman of Hana Financial.
Meanwhile, the uncertainties involve legal disputes over the FSC’s approval of the merger between Hana and KEB.
The labor union of Korea Exchange Bank sought injunction to tackle the financial regulator’s endorsement of Hana Financial’s takeover of KEB.
The unionized workers and a group of KEB’s small investors filed for the injunction with the Constitutional Court at the end of last month.
The FSC has been negligent in probing eligibility of Lone Star as the biggest shareholder of KEB over the past few years, the union said.
The workers continued to argue that the equity fund has been ineligible to control the bank, alleging that it was a non-financial investor.
Accordingly, the takeover deal between Hana and Lone Star was invalid from the start, they argued.
By Kim Yon-se (kys@heraldcorp.com)
Foreign investors are leaving Hana Financial Group by disposing of their stake amid uncertainties from the group’s takeover of Korea Exchange Bank.
Following the departure of Temasek Holdings in October, Goldman Sachs sold off its entire stake in Hana Financial on Tuesday.
At the end of June 2011, Temasek, an equity fund controlled by the Singapore government, and Goldman, a global investment bank, were the largest and second-largest shareholders with 9.62 and 8.66 percent stakes, respectively.
There is a possibility that other foreign shareholders including AllianceBernstein, a New York-based investment fund, will join the move, according to financial industry sources.
“Due to Hana Financial’s payment of KEB takeover funds to Lone Star, the group will have no choice but to slash its dividends to shareholders,” an official of the Financial Supervisory Service said.
He cited uncertainties over Hana’s future profitability and stock prices for their exits.
“Further, the KEB union may stage an all-out strike according to the coming situation.”
Most of all, the funds originally were not interested in long-term investment, the official added.
An analyst commented on Hana Financial having to pay strategic investors who participate in the group’s acquisition of KEB a certain level of premiums.
As a result, the National Pension Service, then third-largest shareholder, has been the biggest shareholder of Hana Financial.
The state-run NPS is reportedly poised to dispatch an outside director to Hana Financial.
The situation is inviting speculation that policymakers such as the Financial Services Commission and the Finance Ministry will intervene in management of the group.
While Hana chairman Kim Seung-yu expressed his willingness to resign, a personnel reshuffle for the group’s senior posts is inevitable.
Yun Yong-ro, a former senior financial regulatory official from the FSC, has been appointed to CEO of KEB and vice chairman of Hana Financial.
Meanwhile, the uncertainties involve legal disputes over the FSC’s approval of the merger between Hana and KEB.
The labor union of Korea Exchange Bank sought injunction to tackle the financial regulator’s endorsement of Hana Financial’s takeover of KEB.
The unionized workers and a group of KEB’s small investors filed for the injunction with the Constitutional Court at the end of last month.
The FSC has been negligent in probing eligibility of Lone Star as the biggest shareholder of KEB over the past few years, the union said.
The workers continued to argue that the equity fund has been ineligible to control the bank, alleging that it was a non-financial investor.
Accordingly, the takeover deal between Hana and Lone Star was invalid from the start, they argued.
By Kim Yon-se (kys@heraldcorp.com)
