Heavy sanctions unlikely for Woori chief
The Financial Supervisory Service (FSS) may readjust its punishment of Woori Financial Group Chairman Son Tae-seung — which the regulator had already given him pre-notification of — regarding his failure to prevent Woori Bank’s mis-selling of Lime Asset Management funds that caused huge losses for investors last year.
It was initially planning to suspend Son from work, which would mean he would be prohibited from working for any financial company for five years.
However, the financial overseer has apparently taken into account Woori Bank’s efforts to compensate the investors as a mitigating factor.
Representatives from the FSS’ financial consumer protection department will attend a final hearing to determine the specifics of sanctions on the bank, Thursday, and express their opinions on the bank’s efforts, said sources familiar with the issue.
Woori Bank agreed last year to return the principal to those who
invested in Lime’s Pluto TF-1 fund.
It is also expected to accept the latest FSS recommendation that it and the Industrial Bank of Korea (IBK) pay up to 78 percent of the losses of customers who invested in Lime’s other funds.
“We respect the recommendation,” a Woori Bank official said. “We will hold a board meeting early next month to discuss the recommendation and make a decision on how best to protect our customers.”
Last year, the FSS softened its sanctions on KB Securities CEO
Park Jeong-rim over her responsibility for the company’s mis-selling of Lime funds, after the brokerage accepted its recommendation on compensation.
Former IBK CEO Kim Do-jin, who received a prior notice of heavy punishment last month for the same reason, also received lighter punishment earlier this month after the state-run bank began to compensate victims.
However, the FSS is unsatisfied with Shinhan Bank which decided last June to return only 50 percent of the principal to those who invested in Lime’s Credit Insured fund.
Sources said financial consumer protection department officials will not attend the hearing to determine the level of sanctions on Shinhan, which will be held the same day as the hearing on Woori.
Shinhan Bank CEO Jin Ok-dong also received a prior notice regarding heavy punishment earlier this month.
If the financial overseer doesn’t lighten this, Jin may consider filing an administrative lawsuit against it to prevent any “leadership vacuum.”