Firm Denial of Official Meddling

It’s business as usual for Pres. Kang as he promises to remain in office until the expiry of his term in October and is still looking for a possible M&A with KEB

Kookmin Bank President Kang Chung-won said he will do his job fully as CEO of the bank until his term of office expires in October. During a brief session with media at the bank’s headquarters in Yeouido on Jan. 11, the CEO said Kookmin is ready to take over Korea Exchange Bank if it is up for bidding while he is in office as he plans to go ahead with the bank’s M&A deals, meaning that he will be fully responsible for the bank’s management.
Kang also tried to clear up various rumors regarding the withdrawal of his nomination as chairman for KB Financial Group, a position that was left vacant since the abrupt resignation of former chairman Hwang Young-ki last year, as he was held responsible for various deals that didn’t work as intended while heading Woori Bank as president in 2008.
He also said his withdrawal as candidate for chairman of KB Financial was not forced by the financial authorities, but was based on his own decision, refuting reports indicating possible bureaucratic hands behind Kang’s move.
Kang said he decided that he should withdraw his name as rumors swirled around his nomination, some saying it was unfair, and he felt if he became chairman it would not be best for the company or for the shareholders. He still thinks it was the right decision, he said.
Kang also refuted rumors that the Presidential Office had somehow been involved with his withdrawal by saying that the Presidential Office had more important things to do than involve itself with such small affairs as his nomination.
As an indication that things are not going too well for Kang these days, the Financial Supervisory Service has decided to conduct an investigation into Kookmin Bank amid criticism of bureaucratic meddling in the financial market, which will be a great burden on the bank and Kang. It is not clear if the criticism of government hands in the banking community would cease despite Kang’s denial.
Kang himself is suspected to have aroused the suspicion of possible government meddling by saying that the chairman of the board of directors of Kookmin Bank delayed the board’s meeting to approve Kang’s nomination according to a source. The statement gave the impression that the chairman had to postpone the meeting to approve the nomination of Kang as the next chairman of KB Financial Group, setting off wild speculative reports in the newspapers.
The situation became so serious that the bank issued a statement saying no one among the financial authorities told the board to delay the meeting, but the delay occurred due to the suggestions of academics and journalists to delay the process of the selection by the Chairman Candidate Selection Committee, and that no one told members of the board or the bank to postpone the meeting.
Commenting on the personnel move made recently, Kang denied that it was part of his plan to consolidate his leadership at the bank, saying that it was the annual personnel shakeup held every year. He promoted President Kim Joong-hi of KB Financial Holding to vice chairman of KB Asset Management for the effective management of the organization based on managerial judgment after full consultation with the new vice chairman.
On various suspected wrongdoings in the bank’s operation, he said every one of them will be cleared up when the audit of the bank by the Financial Supervisory Service and the Bank of Korea is completed.
He said there was nothing wrong with his decision to make an investment in the BCC (Center Credit Bank) in Kazakhstan, as the country is rich in natural resources, especially oil, calling it a strategic investment.
On criticism over the bank’s investment in a film production in 2007, Kang said that at the time the move was cleared through a bank audit and it will also be found to be proper following the current audit.
On having two chauffeurs, he said he didn’t want them to be too tired when driving his cars around by letting them sharing the chore to prevent accidents.
An official with the FSS said they don’t have any complaints about Kang keeping his job until the term expires. It is strictly up to the bank’s board. nw

Kookmin Bank President Kang Chung-won