Are days numbered for ‘MB men?’

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Are days numbered for ‘MB men?’

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Just a day after President Park Geun-hye hinted that the heads of public institutions appointed by her predecessor will be replaced en masse, speculation is rife about what lies in store for the CEOs of both state-owned and private financial institutions.

In her first cabinet meeting Monday, Park stressed that personnel changes are important for the success of the new government.

“There will be many appointments in agencies under the ministries and public institutions,” Park told ministers. “You should look to appoint people who share the governance philosophy of the new administration.”

Some industry insiders said Park’s remarks could be understood as urging the heads of both public and private financial institutions known as members of the inner circle of former President Lee Myung-bak to voluntarily step down.

According to market observers, 19 of 26 financial institutions, including 13 state-run financial institutions and five financial holding companies, are headed by former bureaucrats of the Lee government.

Industry insiders are paying attention to the fate of these heads given the former president’s handling of personnel appointments in the financial sector.

After he took office in 2008, one of the first things Lee did was to conduct a massive reshuffle of the financial sector.

“Lee decided whether CEOs and executives appointed by his predecessor, Roh Moo-hyun, would get to keep their jobs by first receiving their letters of resignation,” said an executive at a financial holding company that runs one of Korea’s major banks. “He accepted some of them regardless of how much time remained in their terms. There seemed to be no objective yardstick to explain his decisions.”

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Market observers are watching KB Financial Group Chairman Euh Yoon-dae, whose term ends in July. Euh, former president of Korea University, is known as an “MB man” for his close personal ties to the former president.

Given that KB Financial Group is a private, some suggest Euh may feel less pressure than the government-nominated chiefs of Woori Financial Group and KDB Financial Group.

Woori and KDB are headed by Lee Pal-sung and Kang Man-soo, respectively, who are also known as “MB men.” Their terms end in March 2014.

The term of Chang Young-chul, CEO of state-run Korea Asset Management Corporation, ends in November.

The term of Export-Import Bank of Korea CEO Kim Yong-hwan expires in February 2014 and Korea Finance Corporation CEO Chin Young-wook is scheduled to retire in September 2014. Korea Housing Finance Corporation CEO Seo Jong-dae’s term ends in November 2014.

In regard to mounting speculation that a personnel reshuffle in both public and private sectors is imminent, a senior official at the Financial Services Commission said, “The fate of chiefs at state-owned financial institutions will be determined when FSC chairman appointee Shin Je-yoon passes a parliamentary confirmation hearing on Monday.”

The FSC’s role of mapping out government fiscal policy and overseeing financial markets and related institutions has been at a standstill since former FSC Chairman Kim Seo-dong left the post on Feb. 25, 10 months before the end of his term.


By Kim Mi-ju [mijukim@joongang.co.kr]

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