Promise to Strengthen Management of Loans to Relatives
Establishment of Ethics Management Office for Executive Oversight
Lim Jong-ryong, Chairman of Woori Financial Group, announced that he will no longer exercise personnel authority over subsidiary executives. This is interpreted as his acknowledgment of responsibility for the improper loans related to relatives of former Chairman Sohn Tae-seung and his intention to relinquish his authority.
Chairman Lim appeared as a witness at the National Assembly's Political Affairs Committee audit on the afternoon of the 10th and stated, "We will abolish the prior agreement system related to the appointment of subsidiary executives and guarantee the autonomous management of affiliates."
Woori Financial Group has so far required subsidiary representatives to consult with the holding company chairman in advance when appointing executives, but going forward, it plans to eliminate this procedure to reduce authority.
Regarding the abolition of the prior agreement system, he explained, "(The prior agreement system) was also the cause of this incident," and added, "I believe it is necessary to adjust the chairman's authority and functions."
Chairman Lim also pledged to establish a system to manage loans to relatives. He emphasized, "We will register credit information of relatives with the consent of all executives of the group companies," and "We will prepare handling guidelines for loan processing and strictly conduct post-appropriateness reviews."
He continued, "To ensure checks and supervision over management, we plan to establish an Ethics Internal Control Committee composed solely of outside directors," and added, "An Ethics Management Office, headed by an external expert directly under the committee, will be created to oversee audit functions and internal whistleblowing systems."
He further stressed, "We must drastically change the loan screening management process," and said, "We will upgrade the loan supervision organization, strengthen internal whistleblowing channels for improper loans, and build a system capable of electronically detecting abnormal transactions, to be implemented from next year."
In response to the Political Affairs Committee members' criticism regarding improper loans, Chairman Lim repeatedly bowed his head and said, "I sincerely apologize for causing concern to the public."
Regarding his future position, he stated, "I feel a deep sense of responsibility for damaging Woori Financial's trust," and added, "If there is anything I must be held accountable for due to my mistakes, I will take responsibility."
When asked about the suggestion that Financial Supervisory Service Governor Lee Bok-hyun pressured him to resign, Chairman Lim replied, "I do not think it was personnel interference."
He added, "I understand that Governor Lee emphasized the need for management's awakening and reform," and said, "I fully agree."
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