Ex-KB Financial chief to end lawsuit

Lim Young-rok, former chairman of KB Financial Group, dropped his lawsuit against the Financial Services Commission and ditched his executive director position at the group.

“I will put down everything,” said Lim in a statement via his law firm. “The lawsuit and injunction against the FSC will be canceled and I will step down from the executive director position.”

Lim’s decision came unexpectedly yesterday, after his stubborn stance that denied his responsibility for causing the group’s internal strife and opposed to the authority’s punishment.

The FSC ordered a three-month suspension on Lim Sept.12, accusing Lim of aggravating a boardroom feud with Lee Kun-ho, former president of Kookmin Bank, a main subsidiary of the group.

The feud between the two was about switching the bank’s main computer system. Lee requested an investigation to the Financial Supervisory Service (FSS), alleging that Lim intervened in the bank board’s decision making process.

The FSS that has direct oversight power on banks punished Lee with a reprimand that can bar him from landing a job in the financial industry for three to five years Sept.4. It recommended the same reprimand for Lim to the upper FSC.

The FSC, however, raised the level of punishment to immediate suspension.

Lim strongly denounced the FSC, saying that the punishment is unfair for what he had done, and filed an injunction to nullify the authority’s decision Sept. 16.

It seems like that it wasn’t easy for Lim to maintain the stance after KB Group board members decided to dismiss the chairman Sept. 17. He was planning to make a comeback after the three-month suspension, but he couldn’t make it because of the board’s decision. Seven out of nine board members approved for firing Lim.

Lim, a former government official who served as vice minister at the Ministry of Finance and Economy from 2007 through 2008, was appointed as CEO of the KB Holding Company in 2010 by former chairman Euh Yoon-dae, who was known as a strong aide to former President Lee Myung-bak. Lim was nominated chairman last July.

After the dismissal, the board has embarked on nominating a new chairman. The group’s candidate recommendation committee is currently hunting for successful candidates. The group will fill the empty bank CEO post after appointment of the chairman.

This time, the group is considering asking a successful candidate for chairman to assume the bank CEO position, too. Such decision was made based on critics’ evaluations that the two-head system within a financial group doesn’t help improve efficiency of the entire group but rather boosts confusion and conflicts.

BY SONG SU-HYUN [ssh@joongang.co.kr]