[Asia Economy Reporter Kwangho Lee] The Financial Supervisory Service's Disciplinary Committee, which determines the level of sanctions against Shinhan Bank and Shinhan Financial Group, the sellers of Lime Asset Management's private equity fund, will resume on the 22nd.
The disciplinary committee is expected to start in the afternoon and likely conclude late at night. Both sides are anticipated to engage in intense debates over issues such as internal controls.
Previously, the Financial Supervisory Service preliminarily notified Shinhan Bank of institutional and executive disciplinary actions for the incomplete sales of the Lime fund.
Jin Ok-dong, CEO of Shinhan Bank, received a "reprimand warning," while Cho Yong-byeol, chairman of Shinhan Financial Group, was given a "cautionary warning."
The levels of sanctions for financial company executives are divided into five stages: dismissal recommendation, suspension of duties, reprimand warning, cautionary warning, and caution. Among these, reprimand warning or higher is classified as a severe sanction that restricts employment in financial companies for 3 to 5 years.
The financial sector expects the disciplinary levels for CEO Jin and Chairman Cho to be mitigated.
Son Tae-seung, chairman of Woori Financial Group, who was already subject to the Lime fund disciplinary committee, accepted the compensation plan recommended by the Dispute Mediation Committee and received a reprimand warning, one level lower than the previous suspension of duties.
Shinhan Bank also held a board meeting the previous day and accepted the Dispute Mediation Committee's compensation plan (up to 80%), making a reduction in the disciplinary level highly likely. In particular, CEO Jin will be able to avoid severe sanctions and pursue additional reappointment and the next chairman position of the holding company.
Meanwhile, the Dispute Mediation Committee applied a basic compensation ratio of 55% for Shinhan Bank's liability for damages due to incomplete sales of the Lime fund and decided the compensation ratios for two investors at 69% and 75%, respectively.
Accordingly, Shinhan Bank held a board meeting on the 21st and resolved to accept the Dispute Mediation Committee's adjustment plan.
A Shinhan Bank official stated, "If the two customers whose compensation ratios have been finalized according to the Dispute Mediation Committee's compensation plan agree, the compensation will be paid immediately," adding, "We will promptly proceed with compensation procedures for other customers in the same manner."
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