KT cannot raise its K bank stakeKT won’t be permitted to increase its stake in K bank as the technology company is currently under investigation.
The Financial Services Commission (FSC) on Wednesday, citing banking regulations, said it was cancelling the review of KT’s application to up its ownership of the internet bank.
According to the FSC, it can decline an application if the company seeking approval is under investigation. The investigation would have to be seen as having an impact on the pending application.
The mobile carrier and Kakao both applied to raise their stakes in their online banks last month.
Last year, the National Assembly passed a reform bill that eased restrictions on the ownership of online banks by nonfinancial companies, as the online banks are struggling to secure additional investment.
Under the terms of the bill, nonfinancial companies with more than 50 percent of their total assets in information and telecommunication technology (ICT) to own up to 34-percent of online banks.
This was up from the previous limit of 10 percent.
KT is currently the second-largest shareholder of K bank with a 10 percent stake.
Allowing KT to become a larger investor in the online bank was expected to help K bank expand. The online bank was planning for a 592 billion won ($522 million) paid-in capital increase on April 25.
K bank has been cancelling some of it loan products as it has been suffering a capital shortage.
K bank, the country’s first online bank, last year reported a net loss of 79.7 billion won. Although the net loss was 4.1 billion won less than the loss in 2017, it was still triple Kakao Bank’s loss.
KT is under several investigations. Since the beginning of the year, the mobile carrier has been investigated by the Fair Trade Commission on possible collusion with the two other mobile carriers - SK Telecom and LG U+ - over a circuit-line business project. The company is also being investigated by the prosecutors’ office regarding the recruitment of the daughter of Liberty Korea Party lawmaker Kim Sung-tae.
Last month, KT Chairman Hwang Chang-kyu was accused of bribing influential individuals, including politicians, high-ranking government offices and police officers.
The FSC’s decision comes as at is planning to offer up to two new online banking licenses this year.
BY LEE HO-JEONG [firstname.lastname@example.org]
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