KB Chairman’s fate looks diceyKB Financial Group’s board of directors gathered yesterday to pound out an agreement on Chairman Lim Young-rok’s fate prior to an official meeting slated for tomorrow.
After the abrupt meeting held at a hotel in central Seoul, outside director Lee Kyung-jae told reporters that although the board members had different opinions, they agreed that Lim should make a wise judgment for the sake of the group. Lee has taken over as acting chairman since Lim was suspended last week.
“The members agreed that Lim should make a wise decision himself,” Lee said.
Lim was slapped with a three-month suspension from work by the Financial Services Commission (FSC) on Friday for not taking responsibility as group leader and aggravating a boardroom feud with the former chief executive officer of the group’s subsidiary Kookmin Bank, Lee Kun-ho, over changing the bank’s main computer system.
The remarks can be interpreted as the board wanting Lim to step down voluntarily.
However, Lim has said he will not resign and asserts that the FSC’s punishment is unreasonable. If he doesn’t step down from his position, the board could hold a vote to force his resignation on Wednesday.
If the majority of the nine board members votes for Lim’s dismissal, he will be fired.
According to sources in the financial industry, even board members that are close to Lim think he should leave the group.
After Friday’s FSC decision, Lim said in an official release that he would seek every possible measure to prove the truth, including legal action.
The KB boardroom feud has been making headlines since May after Kookmin Bank CEO Lee Kun-ho requested an investigation of the computer issue by the Financial Supervisory Service (FSS).
Lee, who stepped down after the FSS reprimanded him, alleged that Lim had unfairly exercised his power in the bank’s project to switch its computer system from IBM to Unix. Lee argued there was manipulation of internal reports regarding the project’s costs as well as the results of systems tests.
The FSS also recommended a reprimand for Lim on Sept. 4.
The group’s stock has started to plunge. Yesterday it fell 5.22 percent, from 43,400 won ($41) to 39,000 won.
Both the group’s management and the government are being blamed for failing to resolve the problem at an earlier stage.
The FSS took more than a month to investigate the conflict and switched from a light verbal warning to a reprimand that could bar the executive from landing a job in the industry for three to five years.
The upper FSC raised the reprimand to the stronger penalty of a three-month suspension.
“Some say the FSS was very awkward in handling the issue from the beginning,” said an industry insider.
By SONG SU-HYUN[firstname.lastname@example.org]
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