Son Tae-seung, Chairman of Woori Financial, Enters 'DLF Disciplinary Hearing'... Attention on Disciplinary Level

First Substantive Argument at the Sanctions Review on the 22nd
All-Out Effort to Lower Disciplinary Level to a Minor Sanction

Son Tae-seung, Chairman of Woori Financial Group

[Asia Economy Reporter Kim Hyo-jin] Sohn Tae-seung, Chairman of Woori Financial Group and CEO of Woori Bank, has begun a full-scale confrontation with the Financial Supervisory Service (FSS) over disciplinary actions related to the overseas interest rate-linked derivative-linked fund (DLF) scandal.

According to financial authorities on the 22nd, Chairman Sohn attended the second disciplinary review committee meeting regarding the DLF loss incident held at the FSS in Yeouido, Seoul, at 2 p.m. He arrived at the FSS around 12:40 p.m.

For Chairman Sohn, this disciplinary review is the "main game." The FSS held the first disciplinary review on the morning of the 16th, but the proceedings, including the defense of Vice Chairman Ham Young-joo of Hana Financial Group, lasted about nine hours, leaving Sohn with insufficient time.

The FSS is conducting this disciplinary review in a grand jury format. Similar to a court trial, the disciplinary subject and FSS officials state their positions and provide explanations at the review venue, engaging in mutual rebuttals. An FSS official said, "This disciplinary review for Chairman Sohn may also be quite lengthy," adding, "The principle is to listen as fully as possible to the disciplinary subject's position."

Last month, Chairman Sohn received a preliminary notice from the FSS about the possibility of a severe disciplinary action, a written warning. If the written warning is confirmed, he can complete his remaining term as an executive but will be restricted from employment in the financial sector for three years thereafter.

Chairman Sohn was recommended last month as the next chairman candidate for a three-year term. The outcome of the disciplinary review could affect whether he retains his position as chairman. Therefore, Sohn plans to make every effort during the review to reduce the severity of the disciplinary action.

To this end, he is expected to refute the grounds for the disciplinary action presented by the FSS, such as internal control deficiencies and excessive management pressure, and argue the unfairness of bearing almost full responsibility as chairman or CEO.

The disciplinary review will be held once more on the 30th. Depending on circumstances, additional disciplinary reviews may be held next month. On the 20th, after completing a "sharing activity" event at Mangwon Market in Mapo-gu, Seoul, FSS Governor Yoon Seok-heon responded to reporters' questions about whether the disciplinary review results would be announced within this month by saying, "It may take more time."