Gov. Min to lead privatization of state-run bank to be a holding company

Financial Services Commission recommended Min Euoo-sung, country head and CEO of Lehman Brothers Seoul branch, as next governor of Korea Development Bank on June 3 and he will take office formally pending the presidential approval, which is expected to come soon, FSC said.
In a press conference held following the nomination, Min said he will put his top priority on the privatization plan and transformation of the KDB into a global investment bank.
"Timing is just right for us to tap the international financial market,"the KDB governor-designate said.
"The market overall has been slow because of the subprime mortgage crisis but my experience and global networking should help design global business plans,"he said.
Min's job also would involve coordinating opinions of different stakeholders of the KDB.
He said he will do his utmost to secure consensus of the ways to privatize the government-run KBD, aware that stakeholders of the bank have not been able to reach agree on the ways to go about turning the bank into a private banking facility.
Chairman Jun Kwang-woo said the current title of 'governor'will not be used any longer, adding that the government is still working on the details of the corporate governance structure of the planned KDB holding company.
Min is likely to serve as head of the holding company but the government plans to designate the KDB's chairman of the board of directors as someone who could represent the government interest.
Min, 54, also worked as president of Salomon Smith and Barney KEB Securities and head of Investment Banking of Morgan Stanley Seoul branch. He started his career with Citibank Seoul branch in 1981.
In the meantime, FSC announced its plan to transform the KDB and turn it into a financial holding company.
The plan calls for spinning off a number of its affiliates including Daewoo Securities Co. Other key KDB assets, including Hynix Semiconductor Inc., and Korea Electric Power Corp. will be turned over to the new Korea Development Fund(KDF), formerly Korea Investment Fund.
FSC said the announcement of the plan has been put off for two weeks to coordinate with the blueprint for the privatization of other government-run companies.
The FSC chairman said the commission will work to remove all uncertainties in policies over the privatization plan. The idea for employing a multi-stage process is to speed up the work in its process, he said.
FSC Vice Chairman Rhee Chang-yong said at issue in transforming KDB is how to maximize the value of the state-run bank, while doing away with conflicts of interest between the KDB and the private financial sector.
Rhee was one of the key men on the presidential transitional committee that dealt with the privatization plan, which will enable KDF to take over much of the function from the KDB as a policy loan bank. The state-run bank also has been the largest issuer of overseas bonds and it also has played a major role in providing policy loans to small and medium business firms.
The timeframe for selling government's 49 percent stake in the KDB has been cut to three years and the government plans to complete the privatization of the KDB while President Lee is in power until 2012.
Proceeds from the KDB sale will go to the fund and the stake will be divested between 2009 and 2010 through various methods--pre-initial public offering investment, listing and block sales.
Details of methods to sell the 49 percent shares in the KDB have yet to be fixed. nw

Gov. Min Euoo-sung of Korea Development Bank.

KDB head office in Yeouido

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