Bank Gets Warning Over Stock Options

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Bank Gets Warning Over Stock Options

A committee of the Financial Supervisory Service has issued a provisional warning to Korea First Bank for failing to disclose its March 2000 decision to give stock options to its executives. The committee's opinion will be reviewed by the supervisory body next month, when a decision will be made on whether the "warning" will stand or be replaced by a "reprimand," meaning harsher penalties.

"We considered a stronger reprimand," an official from the committee said, "but decided to keep the sanction low as the bank acknowledged it was at fault."

Warnings issued by the agency to an institution are, in effect, caveats to the head of the company. Two "warning" constitute a "reprimand." If a firm gets a reprimand, its head - in this case, Korea First President Wilfred Y. Horie - cannot be reelected to the top post for three years.

The bank, recipient of a state bailout, is being criticized for plans to give its executives stock options again this year. The agency said it will review the option prices the bank revised to meet government standards.


by Huh Gui-sik

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