[DLF Disciplinary Action] Disruption Inevitable in Hana Financial Succession Plan

Financial Supervisory Service Disciplinary Committee Imposes Severe Sanction on Han Young-joo, Vice Chairman of Hana Financial Group
If Sanction Confirmed, Prohibited from Serving as Financial Company Executive for 3 Years

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] The Financial Supervisory Service (FSS) has issued a severe disciplinary action of a "written warning" against Ham Young-joo, Vice Chairman of Hana Financial Group, causing disruption to Hana Financial's succession plans. The current chairman, Kim Jung-tae, has a term until March next year, but the possibility that Vice Chairman Ham, one of the leading candidates for the chairman position, will be unable to challenge for the role has increased significantly.

According to financial circles on the 31st, the FSS held a disciplinary committee meeting yesterday regarding the overseas interest rate-linked derivative-linked funds (DLF) that caused a large-scale principal loss incident and decided to issue a written warning to Vice Chairman Ham. Ham served as the CEO of Hana Bank during the period when Hana Bank was heavily selling DLF products. Alongside Vice Chairman Ham, current Hana Bank CEO Ji Sung-kyu was given a lighter disciplinary action of a "cautionary warning."

The written warning is finalized with the approval of the FSS chief, but since the disciplinary action involves both individuals and institutions, the procedure requires a resolution at the Financial Services Commission's regular meeting before the discipline is confirmed and notified to the bank.

The disciplinary committee members decided to recommend to the Financial Services Commission a six-month partial suspension of business and imposition of fines on Woori Bank and Hana Bank for violating internal control standards under the Financial Company Governance Act.

The disciplinary levels for the executives and institutions will be officially notified together after the regular meeting, which is expected to take about a month.

[Image source=Yonhap News]

Hana Financial has not issued any particular statement regarding the disciplinary decision. A Hana Financial official said, "No position has been decided yet." It is expected that their stance will be organized only after the discipline is finalized and the sanction notice is received. It is also reported that no decision has been made regarding Vice Chairman Ham's voluntary resignation or other status.

Vice Chairman Ham can complete his remaining term as vice chairman but is effectively unable to challenge for the next chairman position. If the written warning is finalized, Ham will be barred from holding executive positions in financial companies for three years.

Chairman Kim's term lasts until March next year, and Vice Chairman Ham has always been regarded as the next-generation leader to lead Hana Financial.

He served as the inaugural integrated CEO when the former Hana Bank and Korea Exchange Bank merged on September 1, 2015, and from 2016, he solidified his position as the group's second-in-command as the holding company's vice chairman. He also stepped down after conflicts with the FSS last year when attempting a third term as CEO.

For Vice Chairman Ham to challenge for the chairman position, he must first invalidate the disciplinary action. Once the sanction takes effect, he can file an objection with the FSS within one month, and also has options to file an administrative appeal with the Administrative Appeals Commission or initiate an administrative lawsuit in court.

Vice Chairman Ham is also currently on trial at the Seoul Western District Court, having been indicted without detention on charges including recruitment corruption.

This content was produced with the assistance of AI translation services.