Woori CEO resigns amid hiring scandal
Woori Bank CEO Lee Kwang-goo stepped down and apologized for causing controversy over the bank’s alleged illicit hiring of the offspring of government officials as its employees.
He said in an email to the bank’s employees on Thursday he takes “responsibility as the top manager of the bank.”
He asked the board to carry out the process to select his successor immediately.
Lee also called on his employees to work with the next CEO to continue pursuing its plan to build a holding company system in the near future.
“With 118 years of history, I hope Woori Bank will continue to grow by contributing to the economy and to social progress,” Lee wrote in the email to his employees.
A Woori Bank official said Lee will faithfully respond and answer any questions by the prosecutors in their investigations into the illicit hiring, which is suspected to have taken place in 2016.
Woori Bank and Lee have been under the spotlight during a National Assembly audit of the country’s financial regulators.
Woori Bank is alleged to have hired more than a dozen people who were either the offspring or relatives of officials from the Financial Supervisory Service (FSS) and the National Intelligence Service (NIS). The former is the country’s financial regulator while the latter is its spy agency.
Also, lawmakers claimed the bank hired offspring of its main customers, accusing the bank of intending to receive favors and benefits from the former government. In particular, Rep. Sim Sang-jung of the minor opposition Justice Party raised the issue in the National Assembly sessions.
This led the finance ministry to conduct an all-out nationwide probe into state-run enterprises’ hiring records and methods, vowing to root out malpractice once and for all.
Finance Minister Kim Dong-yeon recently said his ministry will no longer tolerate this, and will expand its probe further.
Woori Bank CEO Lee took charge of the Seoul-based lender in 2014 and renewed his contract earlier this year.
A former sales executive, he was credited with drawing investors to the bank as part of its privatization. Seven strategic and financial investors acquired a 29.7 percent stake in Woori Bank last November.
The government has tried to privatize Woori Bank since 2001 as it sought to retrieve its investment in the bank. It injected about 12.8 trillion won into Woori Bank in the aftermath of the Asian financial crisis. Such attempts to sell it off failed but the government managed to sell its 29.7-percent stake through block deals.
Lee was previously a vice president of the bank’s client sales unit before he became CEO. His performance has been quite good as the bank managed to raise profits and sales under his leadership.
Lee was also behind securing an account to manage the National Pension Service (NPS) funds as the main bank.
But the hiring scandal cost him his job and all eyes are on other financial leaders, who are also suspected of problematic hiring practices. More executives are expected to resign in the near future.