Board fires KB financial chief

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Board fires KB financial chief

Troubled KB Financial Group Chairman Lim Young-rok was dismissed by the board of directors late Wednesday night after an intense discussion.

The nine-member group decided to force Lim from his position as chairman after he stubbornly refused to resign, even though he was issued a three-month suspension by the Financial Services Commission (FSC) for taking no responsibility for a boardroom feud.

Seven out of the nine board members voted in favor of Lim’s dismissal. Some of them are said to have made failed attempts to persuade Lim to step down.

The board said it made the decision to help normalize operations at the financial group.

“It is unfortunate that the decision was inevitable to stabilize the organization and normalize management,” the board said in a letter to employees yesterday. “It is urgent for the group to regain the trust of customers and the market.”

Lim filed an injunction against the financial authorities to nullify his suspension, but now that the board has fired him, it will be impossible for him to make a comeback in finance. Since he has been terminated, the injunction is unlikely to be accepted.

He has asserted that the FSC’s punishment is unreasonable and said he will seek legal action to unveil the truth regarding the feud.

The internal dispute was sparked in May when Lee Kun-ho, former CEO of Kookmin Bank, requested that the Financial Supervisory Service (FSS) investigate illegal actions of the group’s chairman, who allegedly intervened in the bank’s decision-making process to change its main computer system.

Prosecutors have started investigating the allegations and will summon four executives, including Lim, for questioning.

The board is now expected to nominate candidates for the next chairman based on recommendations from outside directors on the KB Financial Group’s candidate recommendation committee.

After a chairman is chosen, the group will fill the empty bank CEO post. Former CEO Lee resigned Sept. 4 after the FSS reprimanded him. The case marks the first time that a financial group chairman and bank CEO were both forced to step down.

However, the group’s labor union has criticized the board members as also being responsible for the scandal and said the board should not nominate the next chairman on its own.

“The outside directors have been familiar to the old bad customs and they are trying to seek power at the group,” said Seong Nak-jo, leader of the union. “One employee representative should participate in the nomination process.”


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