Daegu Bank Rejects KIKO Compensation Recommendation

[Asia Economy Reporter Minyoung Kim] DGB Daegu Bank has made a final decision not to accept the recommendation for compensation regarding the foreign exchange derivative product KIKO.

On the 5th, Daegu Bank held an extraordinary board meeting and decided not to accept the KIKO compensation recommendation made by the Financial Supervisory Service's Dispute Mediation Committee in December of last year. The committee had ordered Daegu Bank to compensate affected companies with 1.1 billion KRW. This conclusion was reached after five extensions.

Daegu Bank explained, "After careful consideration and referring to legal opinions from law firms, we have decided not to accept the Financial Supervisory Service's KIKO compensation recommendation." They also noted that they took into account the fact that the recovery claims arising from the transactions with the relevant companies were converted into equity and canceled without compensation in two separate instances.

However, Daegu Bank stated, "Regarding the remaining companies involved with KIKO that have not received court rulings, for those companies for which the Financial Supervisory Service has recommended voluntary settlement agreements, we will participate in a bank consultative body for additional KIKO dispute mediation to review the facts and discuss appropriate response measures."

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