Woori Financial Board Decides to Maintain 'Son Tae-seung's Reappointment' (Comprehensive)

"Expressing Opinions Without Sanction Notice Is Inappropriate"
Internally, Opinions Seem to Support Son Tae-seung's Reappointment
Next Week, the Next Woori Bank President Candidate Recommendation Process to Resume

Son Tae-seung, Chairman of Woori Financial Group and President of Woori Bank

[Asia Economy Reporter Kim Hyo-jin] The board of directors of Woori Financial Group has decided to maintain the reappointment of Chairman Sohn Tae-seung. Additionally, Woori Financial plans to resume the selection process for the next Woori Bank president next week.

On the 6th, the Woori Financial board held a meeting at the Woori Bank headquarters in Jung-gu, Seoul, where this decision was made. The board explained, "Since no official sanctions have been notified to individuals (including Chairman Sohn), we judged that it is not timely to express opinions, and therefore agreed that there is no reason to change the previously decided procedures and schedule regarding governance."

The Financial Supervisory Service's Sanctions Review Committee on the 30th of last month decided on a severe disciplinary warning against Chairman Sohn, holding him responsible for the losses related to the overseas interest rate-linked derivative-linked funds (DLF) incident. Last December, Woori Financial recommended Chairman Sohn as the next chairman candidate for a three-year term.

According to the schedule, Chairman Sohn was to be formally appointed at the shareholders' meeting next month, but the 'DLF severe sanction' caused a setback. If the severe sanction takes effect, he can complete the remaining term but will be restricted from employment in the financial sector for the following three years.

Since the Financial Services Commission's resolution procedure on sanctions against the institution (Woori Bank), not the individual, remains, the official notification of sanctions is expected to be made in early next month. For Chairman Sohn to be reappointed, he must resolve the sanction issues through provisional injunction procedures accompanying administrative litigation.

Following the Financial Supervisory Service's Sanctions Review decision, Chairman Sohn has been contemplating whether to challenge the reappointment based on the legal authority granted. There had been speculation that he might reveal his decision at the meeting held that day.

The position announced by the Woori Financial board on that day was superficially that "there is no matter to decide as there has been no official notification of sanctions," but it is known that internally they reaffirmed their support for Chairman Sohn and his reappointment.

A financial sector official commented on the official stance of the Woori Financial board, saying, "Because the matter is very sensitive, it seems that the judgment was made to avoid unnecessarily provoking the authorities."

The resumption of the selection process for the next Woori Bank president is also interpreted as a move to strengthen Chairman Sohn's position.

The Woori Financial Group Executive Candidate Recommendation Committee initially planned to recommend the final candidate for the next Woori Bank president at the end of last month and conducted in-depth interviews with three 'shortlisted' candidates but temporarily suspended the process due to the Financial Supervisory Service's sanctions decision. Chairman Sohn serves as the chairman of the group’s candidate recommendation committee.

Last December, when Woori Financial recommended Chairman Sohn as the next chairman candidate, it decided to separate the group chairman position from the Woori Bank president position. Chairman Sohn is to focus on the complete privatization of Woori Financial and business diversification through mergers and acquisitions (M&A) of securities and insurance companies, while the Woori Bank president is to concentrate on customer-centric management and strengthening sales capabilities, aiming to maximize management efficiency.

A financial sector official said, "The selection process for the next Woori Bank president should be viewed as based on the 'Chairman Sohn Tae-seung' system." The candidates include Kwon Kwang-seok, CEO of the Credit Guarantee Department at Saemaeul Geumgo Central Association; Kim Jeong-gi, head of Woori Bank’s Sales Support Division and HR Group Division (executive vice president); and Lee Dong-yeon, CEO of Woori FIS.