Hamyungju, Chairman of Hana Financial, 'DLF Heavy Sanction Canceled'... Will Disciplinary Level Lower After Second Trial Victory?

Overturning the First Trial Result and Recognizing Only Some Reasons
Hana Financial Group "Will Strive for Effective Operation of Internal Controls"

Hahm Young-joo, Chairman of Hana Financial Group, is speaking at the Financial Holding Companies Chairmen Meeting held at the Press Center in Jung-gu, Seoul on the 31st. The meeting was attended by Kim Joo-hyun, Chairman of the Financial Services Commission; Lee Bok-hyun, Governor of the Financial Supervisory Service; Jin Ok-dong, Chairman of Shinhan Financial Group; Im Jong-ryong, Chairman of Woori Financial Group; Hahm Young-joo, Chairman of Hana Financial Group; Lee Seok-jun, Chairman of NH Nonghyup Financial Group; Yang Jong-hee, Vice Chairman of KB Financial Group; and Kim Kwang-soo, Chairman of the Korea Federation of Banks. Photo by Yoon Dong-joo doso7@

Ham Young-joo, Chairman of Hana Financial Group, won the appeal in a lawsuit seeking to cancel the heavy disciplinary action imposed by financial authorities related to losses from overseas interest rate-linked derivative-linked funds (DLF).

The Administrative Division 9-3 of the Seoul High Court (Presiding Judges Cho Chan-young, Kim Moo-shin, Kim Seung-joo) overturned the original ruling that dismissed Ham’s lawsuit against the Financial Services Commission and the Financial Supervisory Service on March 29, and ruled in favor of the plaintiff. Former Hana Card President Jang Kyung-hoon, who was also tried together, won the case. However, the partial six-month suspension of some operations imposed on Hana Bank was upheld.

The Seoul High Court stated, “The part of the first trial ruling concerning plaintiff Ham Young-joo (reprimand) is canceled,” thereby accepting Ham’s appeal. However, the court ruled that the six-month partial suspension of Hana Bank’s operations (new sales of private equity funds) was justified and dismissed Hana Bank’s appeal against the Financial Services Commission.

DLF is a fund that invests in derivative-linked securities (DLS) based on underlying assets such as interest rates, exchange rates, and credit ratings. In the second half of 2019, as global bond yields plummeted, principal losses occurred in DLS based on U.S., U.K., and German bond yields and the DLFs that invested in them.

In response, financial authorities found that Hana Bank had committed improper sales of DLFs and, in March 2020, imposed a six-month partial suspension of some operations (new sales of private equity funds) and a fine of 16.78 billion KRW on Hana Bank. Ham, who was serving as the bank president at the time, also received a heavy disciplinary action (reprimand) for inadequate management and supervision. Disciplinary actions of reprimand or higher restrict reappointment and employment in the financial sector.

Hana Bank and Ham Young-joo filed administrative lawsuits and requested suspension of execution, disputing the disciplinary actions. The court accepted the suspension of execution, acknowledging the possibility of disputing the legality of the measures, but ruled in favor of the financial authorities in the main lawsuit. The court at the time stated, “The scale of losses caused by improper sales is enormous, and the plaintiffs’ disregard for investor protection obligations while pursuing corporate profits betrays the bank’s public nature, safety, trust, and integrity,” adding, “The executives need to bear corresponding responsibility.”

A Hana Financial Group official said, “We will take this case as another opportunity to consider the consumer’s perspective,” and added, “Hana Financial will continue to strive to ensure that internal controls within the group operate effectively.”