Group of execs at Tong Yang offers to resign en masse

At least 30 executives at a local mid-sized brokerage handed in their letters of resignation en masse recently, a move rarely seen even during financial collapses such as the 2008 Lehman Brothers crisis or the Asian financial crisis of 1997.

The group decision came at a time when many local financial companies are undergoing extensive reshuffles while uncertainty pervades the financial market and indicators point to an economic contraction next year.

A spokesperson for Tong Yang Securities said yesterday that over 30 executives below vice-presidential levels gave notice.

“The action was taken voluntarily as a means of accepting responsibility for the company’s lackluster performance,” said the spokesman. “It was conducted in the same spirit as the extensive reshuffle planned for next year.”

He said that Tong Yang has “more than 40 executives” on its payroll, and that each letter of resignation will be reviewed by top-tier management in January before decisions are made about which to accept. Tong Yang Securities, a mid-sized brokerage that had 16.85 trillion won ($14.6 billion) in assets as of June, recently closed 23 of its branches to shrink its nationwide network to 142.

Although the company had seen its revenue and operating profits increase by 53.6 percent and 545.9 percent, respectively, during the third quarter from the previous three months, its net profit dropped 48 percent over the same period to stand at 4.1 billion won.

Tong Yang was originally planning a full-scale reshuffle next year after its profits from stock investments and M&A businesses all but evaporated.

It also saw its license expire for its “allfinanzberatung” operations, meaning it can no longer engage in financial services across multiple sectors such as receiving deposits, engaging in consumer financing and providing asset management, due to legal revisions.

The news comes at a time where other securities brokerages are also dealing with extensive reshuffles.

At Hyundai Securities, 11 executives are slated to quit by Jan. 1. Another industry leader, Woori Investment & Securities, is planning reshuffles from the executive level down to transform into an investment bank in the near future.

Earlier this month, Mirae Asset Securities gave 10 executives three months’ notice, while Shinhan Investment accepted between 30 and 40 applications for voluntary retirement last month.

This year, the securities sector saw the biggest drop in stock prices, with a 43 percent decline on average.

By Lee Jung-yoon [joyce@joongang.co.kr]