Taeseung Son and Youngju Ham Confirmed for Severe DLF Disciplinary Action

Yoon Seok-heon Financial Supervisory Service Chief Approval
Sanctions Effective Early Next Month

Yoon Seok-heon, Governor of the Financial Supervisory Service

[Asia Economy Reporter Kim Hyo-jin] The 'DLF heavy disciplinary action' against Sohn Tae-seung, Chairman of Woori Financial Group and CEO of Woori Bank, and Ham Young-joo, Vice Chairman of Hana Financial Group, has been confirmed.

The Financial Supervisory Service (FSS) announced on the 3rd, "Governor Yoon Seok-heon officially approved the report on the results of the 3rd Disciplinary Committee meeting."

The FSS Disciplinary Committee resolved on the 30th of last month to issue a heavy disciplinary warning to Chairman Sohn and Vice Chairman Ham regarding the overseas interest rate-linked Derivative Linked Fund (DLF) loss incident.

Disciplinary actions against financial company executives up to a warning are finalized when the FSS Governor approves after the disciplinary committee review. The effect takes place when the party receives the FSS inspection notice.

The FSS plans to notify the disciplinary results for executives including Chairman Sohn together with the institutional sanctions for Woori Bank and Hana Bank once the Financial Services Commission (FSC) passes a resolution on the institutions.

The disciplinary committee imposed a six-month partial business suspension and fines on each of these banks. The fines imposed on Woori Bank and Hana Bank are approximately 23 billion KRW and 26 billion KRW, respectively.

Unlike the executive disciplinary warning which is finalized by the FSS Governor's approval, institutional sanctions and fines require review by the Securities and Futures Commission and approval at the FSC regular meeting.

The FSC holds alternating regular meetings and Securities and Futures Commission meetings every Wednesday. Considering this schedule, it is highly likely that the sanctions on the banks will be approved at the regular meeting on the 4th of next month.

Chairman Sohn is expected to soon announce his position regarding his future, as this disciplinary action is linked to the possibility of his reappointment as chairman.

Son Tae-seung, Chairman of Woori Financial Group (left), Ham Young-joo, Vice Chairman of Hana Financial Group.

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