State of our largest bank defies understandingKB Financial Group Chairman Lim Young-rok mentioned in his lawsuit that he wants to repair his reputation by proving the truth about the boardroom feud at the group and show the the unfairness of his punishment.
What captured my attention is the word “reputation.” Is he filing the lawsuit because of pride? Is the punishment really that unreasonable?
Judging based on the facts revealed so far, I understand that such dustups can happen at any business. What I don’t understand is why the financial authorities got so deeply involved in an in-house issue and then flip-flopped on decision after decision.
The Financial Supervisory Service (FSS), in particular, seemingly could not make up its mind on the level of punishment from the very beginning.
The FSS gave prior notification to the financial group of a reprimand in May, after a two-week investigation of the issue that was requested by Lee Kun-ho, then-CEO of Kookmin Bank. But after the notification, the Sanctions Review Committee under the FSS held six meetings to discuss an appropriate level of penalties for Lim and Lee from late June through August. The committee recommended a light penalty for both.
The FSS rejected the recommendation and kept to its initial decision to punish them with a reprimand that prohibits them from working in the financial sector for three to five years after they finish their terms. It was the first time the FSS did not accept a punishment recommended by the committee of nine outside experts.
What made the situation more complex was the subsequent decision by the Financial Services Commission (FSC) to strengthen the FSS punishment for Lim to a three-month suspension prior to the ban.
Before discussing how unreasonable the suspension is, I think the first thing is to ask why the FSC raised the FSS suspension and why the FSS didn’t accept its committee’s suggestion.
There could be invisible pressures from somewhere that make the financial authorities look fickle.
According to a former FSS official, who declined to be named, it is customary that the financial authorities cannot make punishment decisions in accordance with their principles because most of the people subject to punishment are backed by the government or influential politicians.
Lim himself was a government official at one time. He served as second vice minister at the Ministry of Finance and Economy from 2007 to 2008. In 2010, Lim became president of the KB holding company, appointed by the group’s former Chairman Euh Yoon-dae, who was one of the most powerful so-called “financial emperors” supported by former President Lee Myung-bak.
Some have made wild guesses that the current government is attempting to erase the legacy of the Lee administration by making a scapegoat of Lim, regarded as one of the former president’s many parachute appointments.
Also, it seems funny to me that Lim, as the top figure in the industry, filed the suit against the authorities, making the situation even worse.
Whether he is innocent or not doesn’t seem important to consumers, who don’t want their financial institution to make such headlines.
One of my acquaintances, who has been building savings at Kookmin Bank and using a KB credit card, told me the latest crisis made KB look like the National Assembly, where the ruling and opposition parties are in an intensifying confrontation.
Kookmin Bank is Korea’s largest local commercial bank with more than 1,000 branches, but it seems clear that the top management of the bank is not at all concerned about consumers’ unease.
To Lim, I say just admit that you have not been doing what a leader has to do.
To the financial authorities, I suggest they think about ordinary people, who are appalled by the nation’s top financial watchdogs’ unprincipled executions of decisions that result in social inefficiency.
BY Song Su-hyun [firstname.lastname@example.org]
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