Hana to appeal court’s decision on KEB merger
“We are currently collecting data in preparation for submitting a petition including KEB’s fourth quarter performance,” Kim said after attending the inauguration ceremony of Hana Bank’s new President Kim Byoung-ho on Tuesday. “I think we have a chance of winning.”
A week ago, the Seoul court partially accepted an injunction submitted by KEB’s labor union to stop the early merger that Hana Financial Group has been pushing until then end of the first half.
One reason the court accepted the union’s demand is because when Hana Bank acquired KEB, it guaranteed the bank independent management until 2017. The court added that despite the current unfavorable business conditions in the local financial industry, it could not prove Hana’s claim that KEB will be faced with a critical situation if it does not merge with Hana as soon as possible.
On Wednesday, the Chairman said that KEB is underperforming because of a lack of investment made by its former majority stakeholder, Lone Star. The U.S. private equity fund managed KEB from 2003 until it sold its majority stake to Hana Financial Group in 2012.
KEB’s union representatives had previously blamed Kim’s lack of management for the bank’s 82 billion won deficit in the fourth quarter. KEB was the only major bank that reported a deficit in the last three months of 2014.
“While under the reign of Lone Star investment on the organization and the employees was not properly made,” Kim said. “We are currently working to mend the [damage] made in the past four or five years.”
The Chairman said he believes that due to the size of the bank, KEB has the potential to generate a net profit equal to 70 percent to 80 percent of Hana Bank’s profit.
“It’s a serious problem that it currently fails to do so,” Kim said. “KEB is a bank with huge potential. The executive and employees as well as the union workers should see this when they look at the current situation.”
BY LEE HO-JEONG [firstname.lastname@example.org]