Board to discuss KB chairman’s possible dismissal

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Board to discuss KB chairman’s possible dismissal

KB Financial Group will hold an emergency board meeting on Wednesday to discuss the possible dismissal of Chairman Lim Young-rok, who was slapped with a three-month suspension by financial authorities for his managerial lapses and role in an internal feud.

The Financial Services Commission (FSC) on Friday handed Lim an immediate business suspension, after which he will be allowed to finish his term, which expires in 2016. At that time, he will be prohibited from working in the financial industry for three to five years.

In response to the FSC’s decision, KB’s board, which consists of nine external executives and Lim, will gather to organize a contingency plan for the chairman’s absence.

Early predictions about the board’s decision remain difficult to guess. The KB board has long held stances different from those of the government.

“Four of the board members have been working with Chairman Lim for a long time,” said a spokesperson at the group. “It is difficult to speculate what the result will be since each member has pretty strong opinions.”

Many financial industry insiders say it will be impossible for Lim to continue to serve his term after the suspension due to the pressure imposed by the authorities.

FSC Chairman Shin Je-yoon met with KB Board Chairman Lee Kyung-jae on Saturday and explained the authority’s reasoning for the suspension. He also requested that the board help normalize the group’s operations.

According to the Financial Supervisory Service (FSS), the KB chairman seriously damaged the group’s operations after causing an in-house feud with Lee Kun-ho, the CEO at the time, over changing the bank’s main computer system and then not taking responsibility for it.

The argument was sparked in April when Lee requested that the FSS investigate the bank’s decision to switch its computing system from IBM to Unix, citing the manipulation of data that was used in the board’s decision making. The probe found that the bank’s executives altered a report on the computer system change written by an outside consulting firm to favor Unix, and then reported it to the board. The FSS found that Lim abused his power and suggested punitive action be taken earlier this month. The FSS also announced on Sept. 4 that measures be taken against Lee. He resigned immediately.

Apart from the feud, the financial authorities will impose an additional sanction on Lim, demanding he take responsibility for the nation’s worst personal data leak early this year. He is accused of lax practices regarding the management of the personal data of Kookmin Card customers. Approximately 50 million people’s private information was compromised in the breach.


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