Mirae Asset chief forced to step back
Mirae Asset Financial Group said Thursday it has appointed group founder and Chairman Park Hyeon-joo as its global investment strategy officer (GISO).
Park said he decided to “concentrate on the group’s overseas businesses,” but an industry observer said government pressure to reform the governance structure of the nation’s largest financial group is the real reason behind Park’s decision to take a step back from management.
The nation’s antitrust authority began investigating Mirae Asset in December over suspected unfair inter-affiliate transactions to benefit the owner family.
The group was also targeted by the Financial Services Commission’s (FSC) tighter supervision requiring the nation’s conglomerates to sell some of their shares in non-financial affiliates if such businesses were found to have financial risks.
“Park’s decision to take a step back from the front lines won’t settle the questions the authorities raised,” said an industry observer asking for anonymity.
“The group’s major affiliates are all operated by Park’s family members. Even if he steps back from his current position, he will still be able to control the group indirectly.”
A Mirae Asset Daewoo official immediately declined the allegations.
“Park planned to spearhead the group’s overseas operation when Mirae Asset Financial Group acquired Daewoo Securities two years ago,” the official said.
“His two-year managerial term ends soon. Park also became the chairman of the group’s corporate body in Hong Kong in a bid to strengthen its overseas operations. It has nothing to do with such issues. Mirae Asset Financial Group will fully cooperate with the government in reforming its governance structure.”
Mirae Asset’s inter-affiliate dealing practices, on its way to becoming the nation’s largest securities firm, have raised suspicion regarding the group’s murky governance structure.
Mirae Asset has three pillar affiliates — Mirae Asset Consulting, Mirae Asset Capital and Mirae Asset Global Investments.
Park is the largest shareholder of Mirae Asset Capital with a 34.32 percent stake and Mirae Asset Global Investments with a 29.53 percent stake.
Mirae Asset Global Investments also owns a stake in Mirae Asset Capital that plays a de facto holding company role as it owns a stake in its affiliates with over 50 percent of total assets.
Mirae Asset Capital was, therefore, required to turn into a financial holding company by law at the end of September last year.
However, the company managed to avoid the forced conversion by increasing its short-term borrowing since then.