FSS will appeal ruling absolving Woori's Son
On Aug. 27, the court accepted Son's request for a cancellation of a reprimand the FSS had imposed on him over the improper selling of derivative-linked funds (DLFs) that led to big losses for some investors in 2019.
"The FSS decided to appeal to a higher court as we thought there is a need to take additional legal advice on the case, after closely communicating with our internal legal teams and the Financial Services Commission," said Park Ji-seon, director of public relations office at the FSS, in an online press briefing Friday. "We also considered that there is a legal dispute ongoing with Hana Bank on the same issue."
The FSS reprimanded Son for the selling of the DLFs in January 2020, when he was CEO of Woori Bank. As a result, he was prohibited from working for a financial company for at least three years. The FSS held the CEO responsible for failing to make sure high-risk investment products weren't sold to customers lacking expertise in such instruments.
In March 2020, Son asked the court to nullify the reprimand, arguing it was not justifiable for the FSS to penalize management for problems that occurred despite the bank having internal guidelines.
Son requested an injunction on the reprimand until a ruling was made. The administrative court said yes and Son extended his term as chairman at last year's annual general shareholders meeting. His term as chairman ends in March 2023.
Last month, the court concluded that a CEO should not be penalized for employees failing to follow internal guidelines, although it noted that internal controls should have been in place to prevent dangerous product being sold to certain customers.
Woori Bank said in a statement Friday it "respects the decision by the FSS."