Financial Services Commission Orders Former Taekwang Chairman Lee Hojin to Dispose of Goryeo Savings Bank Shares

Confirmed Sentences for Embezzlement and Tax Evasion... Former Chairman Lee's Appeal Lawsuit

Former Taekwang Group Chairman Lee Hojin (Photo by Yonhap News)

[Asia Economy Reporter Kwangho Lee] Financial authorities have ordered Lee Hojin, former chairman of Taekwang Group and major shareholder of Koryo Savings Bank, to dispose of his shares. However, Lee is currently contesting the order through litigation.

According to financial authorities on the 9th, the Financial Services Commission ordered Lee, who failed to comply with the requirement to maintain major shareholder eligibility under the Savings Bank Act, to dispose of his shares in Koryo Savings Bank.

Lee was indicted on embezzlement charges under the Act on the Aggravated Punishment of Specific Economic Crimes and was sentenced to three years in prison by the Supreme Court. Regarding tax evasion charges, he received a six-month prison sentence with a two-year probation and a fine of 600 million KRW.

According to Article 10-6 of the Savings Bank Act, the Financial Services Commission may order a major shareholder who is deemed not to meet the eligibility requirements to fulfill them within six months.

If the major shareholder does not comply with the order, the Commission may order the disposal of shares exceeding 10% of the total shares of the mutual savings bank within six months.

Lee is the largest shareholder of Koryo Savings Bank, holding 30.5% of the shares. If Lee reduces his stake below 10%, the largest shareholder will become his nephew, Lee Wonjun, who holds 23.2%.

However, Taekwang Industrial and Daehan Chemical Fiber, both wholly owned by Lee, currently hold 20.2% of Koryo Savings Bank shares each.

Lee has filed for a provisional injunction to suspend the effect of the stock disposal order and has initiated litigation in court. The injunction was dismissed, and the main lawsuit is ongoing.