Mirae Asset under threat of ex-Kakao Bank CEO
It was quite surprising that Mirae Asset Financial Group founder Park Hyeon-joo’s name was mentioned at the National Assembly last week.
Rep. Lee Yong-woo of the ruling Democratic Party of Korea criticized the business tycoon unexpectedly, Wednesday, when Financial Services Commission (FSC) Chairman Eun Sung-soo and Financial Supervisory Service (FSS) Governor Yoon Sukheun were giving briefings to lawmakers at the National Policy Committee.
The main agenda for their briefings was a series of fiascos involving mis-selling of private equity funds, but the lawmaker particularly attacked Mirae Asset and its founder during his question time.
He called it “inappropriate” for Park to direct global investments by Mirae Asset subsidiaries.
“Mirae Asset has invested a lot in real estate overseas, and this has increased risks,” he said. “Because the owner has believed that he was going in the right direction, the subsidiaries are facing serious risks in their management.”
His remarks came as Mirae Asset is in a legal battle with China’s Anbang Insurance Group over a $5.8 billion deal regarding the purchase of 15 luxury hotels in the United States.
The lawmaker also mentioned the “Insight Fund” the company launched in 2007, to say Park betting on the Chinese market at that time caused a severe loss to his customers.
Lee asked the financial regulators whether they think Mirae Asset’s management style is appropriate.
The FSC chairman said he would review Mirae Asset’s management. The FSS governor agreed with the necessity of Mirae Asset’s cautious approach to its investments, hinting that the financial watchdog may put the company on its watchlist.
Industry insiders are making various guesses about the lawmaker’s hidden intention.
He is the former co-CEO of Kakao Bank, having moved to the internet-only bank in 2016 from Korea Investment Holdings, the bank’s partner. He was elected as a ruling party lawmaker in the 21st general election April 15.
Given that Korea Investment Holdings is a rival of Mirae Asset, some observers speculate that Lee slammed Mirae Asset for the sake of his previous workplace. According to a local news outlet, the Korea Economic Daily, he said Korea
Investment Holdings Chairman Kim Nam-goo has not intervened deeply in his company’s investments.
There is another speculation that the reason Lee attacked Mirae Asset was to help Kakao defeat Naver in their intensifying competition in the financial industry.
Naver Financial joined hands with Mirae Asset Daewoo to offer cash management accounts to its users in an apparent efforts to compete with Kakao Bank and Kakao Pay. The Naver subsidiary also formed a partnership with Mirae Asset Capital to lend money to small- and medium-sized enterprises.
During a press conference, Tuesday, Naver Financial CEO Choi In-hyuk even said financial firms should be on the alert for Kakao — instead of Naver — citing Kakao offers both banking and mobile payment services.
A day after the Naver Financial CEO made the remarks, however, the former Kakao Bank co-CEO condemned Mirae Asset at the National Assembly.