Supreme Court rules in favor of Woori Financial chair Son

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Supreme Court rules in favor of Woori Financial chair Son

 Woori Financial Group Chairman Son Tae-seung [YONHAP]

Woori Financial Group Chairman Son Tae-seung [YONHAP]

 
The Supreme Court ruled in favor of Woori Financial Group Chairman Son Tae-seung on Thursday and said that the regulators should not have punished him for the improper selling of high-risk derivative-linked funds (DLFs) by Woori Bank.  
 
The Financial Supervisory Service (FSS) reprimanded the chairman, who was the CEO of Woori Bank when the bank sold DLFs that lost value in 2019 when the bond yields plummeted.
 
A DLF is a fund that invests in derivatives link to interest rates, exchange rates and credit ratings.  
 
The FSS had held the bank’s CEO responsible for failing to monitor the high-risk investment products from being released and sold to individual customers who lack expertise in the instruments.  
 
The FSS reprimanded Son on five counts, including lack of proper supervision systems and risk management.  
 
The FSS reprimand prohibits a person from working at financial companies for at least three years.  
 
Son was the chief of Woori Bank from December 2017 through March 2020 and became the chairman of Woori Financial Group in December 2018.
 
Son’s term as the chairman lasts through March.  
 
Woori Financial Group’s board committee has not yet recommended a candidate for the chairman role.  
 
The Financial Services Commission (FSC) said Thursday that it respects the court’s ruling and that it will take the outcome into consideration in future cases.  
 
Woori Financial Group said that it respect’s the court’s ruling and that it will build an internal control system that meets the global standards.  
 
“Under the current law, there is no legal basis for imposing sanctions on financial companies for violating obligations to comply with internal control standards,” said an official from the Supreme Court.  
 
Shares of Woori Financial Group fell 1.17 percent Thursday to 1,2650 won ($9.7).  
 

BY JIN MIN-JI [jin.minji@joongang.co.kr]
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