"Only Two Days Left in Term"... Lee Dong-geol, Chairman of Korea Development Bank, May Leave Soon

No Unusual Successor Mentioned, No Separate Announcement on Chairman's Position
Corona Highlights Industrial Bank's Role... Some Speculate Extension Until Year-End
Asiana No-Deal Responsibility Adds Variable

[Asia Economy Reporter Kangwook Cho] With only two days left until the expiration of Lee Dong-geol's term as Chairman of KDB Industrial Bank, attention is focused on his future whereabouts. Unusually, there has been no movement regarding his successor, and Chairman Lee himself has not expressed any position, leading to speculation about the possibility of his reappointment. Some predict that he will remain in office until the end of the year, given the heightened role of the bank amid the COVID-19 pandemic. However, there are also expectations that the responsibility for the failed sale of Asiana Airlines, which has effectively collapsed, could be a variable.

According to the financial sector on the 8th, Chairman Lee, who took office on September 11, 2017, will end his three-year term on the 10th, but his successor has not yet been decided. According to the Korea Development Bank Act, the chairman of KDB is appointed by the president upon the recommendation of the Financial Services Commission chairman. As a policy bank, the chairman of KDB holds a heavy responsibility for the overall economy, including domestic industrial restructuring, making the final decision by the Blue House crucial.

However, despite the position being highly competitive, there has been no notable speculation about candidates for the KDB chairman position so far. This is a markedly different atmosphere compared to past leadership changes. Even within KDB, this is regarded as unusual. Due to the nature of KDB, whose operational direction changes according to government policy, completing a full term is considered difficult. In fact, since KDB's establishment in 1954, only three chairmen have been reappointed: the first governor Koo Yong-seo, and governors Kim Won-ki (15th-17th) and Lee Hyung-gu (25th-26th). Since the Asian financial crisis, no one has completed a full three-year term. The average tenure is only 18 months.

For this reason, the financial sector views the possibility of Chairman Lee's reappointment, who has tackled major tasks, as high. From the beginning of his term, he left a strong impression by resolving issues such as the sale of Kumho Tire, financial support for Korea GM, privatization of Daewoo Shipbuilding & Marine Engineering, and the sale of Asiana Airlines. Previously, Chairman Lee served as a research fellow at the Korea Institute for Industrial Economics & Trade, an administrative officer at the Presidential Secretariat, vice chairman of the Financial Supervisory Commission, chairman of the Securities and Futures Commission, and president of the Korea Institute of Finance, advocating for chaebol reform. He is known as one of President Moon Jae-in's economic mentors. During the last presidential election, he participated in the emergency economic task force of the campaign. After the Moon administration took office, he was once considered a candidate for the Financial Services Commission chairman before being appointed as the right person to lead KDB's corporate restructuring efforts.

Reappointment Gains Momentum Due to COVID-19, but Asiana Airlines Sale Failure Remains a Variable

In particular, the continuity of KDB's operations amid the COVID-19 crisis is creating an atmosphere favoring reappointment. As KDB is solely responsible for restructuring key industries and providing emergency funding, there is concern that changing the control tower could cause operational gaps or disruptions.

There are also rumors that he may remain in office until the end of the year. It is known that the political circles have reached a consensus toward reappointment. Earlier this year, several candidates were mentioned in political circles, but all declined. Some say the candidates felt burdened by inheriting the numerous pending issues during this difficult period. This is interpreted as a reluctance to take on heavy responsibilities during a crisis.

However, the sale of Asiana Airlines, which has become the biggest challenge, is expected to be a variable. When the stock purchase agreement was signed with the HDC Hyundai Development Consortium in December last year, the sale seemed to be proceeding smoothly, but the COVID-19 pandemic completely changed the situation. KDB plans to announce the failure of the Asiana Airlines sale this week and immediately proceed with injecting funds from the Industrial Stabilization Fund. If Asiana Airlines, which will be incorporated into the creditor management system, fails to find a new owner, there are concerns it could become a long-term "tax-eating hippo."

Therefore, with the expiration of his term approaching and the Asiana Airlines M&A ending in no deal, there is speculation that Chairman Lee might decline reappointment to take responsibility. He has privately expressed that he does not intend to seek reappointment and drew a line under reappointment rumors at an online press conference in June, saying, "I am already sufficiently tired." If he steps down, KDB will be led by Acting Senior Deputy President Sung Ju-young until a new chairman is appointed.

A financial sector official said, "Unlike the usual situation where there is abundant speculation about candidates two months before the expiration of an institution head's term, there is no notable candidate for KDB this time, which is unusual," adding, "The market expects a high possibility of reappointment or temporary extension due to the uncertainties caused by the COVID-19 crisis."

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