Turning over a new leafShinhan Financial Group Chairman Ra Eung-chan has officially stepped down, leaving his 52-year career in the world of finance in disgrace.
Ra is credited with turning a small lender that relied heavily on financing from Korean-Japanese investors into the country’s third-largest financial group. He built a unique name and brand for Shinhan by implementing fair lending practices and a fast-track decision-making process.
But it has all come crumbling down for Ra in recent weeks. The internal power struggle that lasted for nearly two months unearthed the dark side of having one person in control for such a long time.
The fight for the reins of the group had all the elements of a feudal saga, including deceit, betrayal and finger-pointing. Top executives threw open the closet door to reveal a huge pile of skeletons.
Ra’s departure might just be another chapter in the story rather than the end, as acting chairman Ryoo Shee-yul - who was formerly the president of Korea First Bank - has a lot of cleaning up to do.
He should first fire both Shin Sang-hoon, chief executive of the Shinhan Group, and Lee Baek-soon, president of Shinhan Bank. The Financial Supervisory Service is investigating both executives over alleged wrong-doings.
The staff and organization are in tatters because of an internal feud. Ryoo must therefore put in place a new power structure and reorganize the group to reflect the interests of shareholders.
The Shinhan debacle has provided us with a priceless example of how an insecure power structure can wreak havoc on a corporation. It is a miracle that the group somehow managed to generate rather large profits for most of the year.
But its prospects still remain murky because of both internal and external challenges.
In the end, Shinhan is responsible for its own destiny. If it can return to its humble roots, it still has a chance to restore its name and past glory.
But if it continues to get caught up in turmoil and individual interests, the group risks falling even further down the ladder.
For more than two decades, Shinhan has been a dominant force in the domestic financial market.
It would be a pity to see all its efforts go down the drain.