Top executives at state-owned financial institutions, organizations and companies are expected to be replaced soon as Shin Je-yoon, the Financial Services Commission chairman-nominee, heralded sweeping changes of top financial posts.

At a confirmation hearing on Monday, the nominee for Korea’s financial regulatory body said that he would suggest and recommend the replacement of incumbent executives to President Park Geun-hye, despite their terms. 

He added that he would replace them, if necessary, with new heads closely aligned with President Park’s policy vision and philosophy, while considering their professionalism in the field.

However, Shin, who will have the authority to appoint top executives at a number of public financial institutions, ruled out “parachute appointments” in which the government selects executives with whom the president has close personal relations.

President Park also asked her Cabinet members last week to appoint new heads of public organizations and companies in line with the new government’s policy goals.

Chief executives at state-run financial companies such as KDB Financial Group headed by Kang Man-soo and Woori Financial Group headed by Lee Pal-seung, are expected to be replaced first, given that Kang and Lee are close confidants of former President Lee Myung-bak.

Kang has not commented on the matter. But news reports said he expressed his willingness to respect the government’s decision.

KB Financial Group headed by Euh Yoon-dae is not a state-owned financial company, but its heads have generally been replaced when a new president takes office as the government considers Kookmin Bank an enterprise that needs to operate in the best interest of the public as it is Korea’s biggest retail banker. Euh has about four months left in his official term as KB Financial chairman. Banking sources said Euh wants to remain in the post until his term ends.

Other heads of public financial companies that are expected to be replaced include the Export-Import Bank of Korea, Korea Finance Corp., Korea Asset Management Corp., Korea Credit Guarantee Fund and Korea Technology Finance Corp.

Last week, Kwon Hyouk-se, governor of the Financial Supervisory Service, the FSC’s regulatory enforcement agency, tendered his resignation to Cheong Wa Dae, and was succeeded by Senior Deputy Financial Supervisory Service Governor Choi Soo-hyun.

Shin and Choi will also be given the immense tasks of managing a fund that aims to support heavy debtors and credit delinquents as President Park seeks to ease rising household debt in Korea, as pledged during her campaign.

By Park Hyong-ki (hkp@heraldcorp.com)