[2020 National Audit] Chairman Lee Dong-geol "KDB Bank Did Not Accept Due to No Incomplete Sales of KIKO"

Koo Dong-geol, Chairman of Korea Development Bank, is adjusting his glasses while attending the National Assembly's National Audit of Korea Development Bank and others at the Political Affairs Committee held on the 16th. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kangwook Jo] Lee Dong-geol, chairman of the Korea Development Bank (KDB), stated on the 16th regarding the KIKO incident, "KDB is not guilty of incomplete sales," and added, "Therefore, we concluded that it is difficult to accept the compensation decision."

On the same day, Bae Jin-kyo, a member of the Justice Party, questioned Chairman Lee at the National Assembly's Political Affairs Committee hearing about the reason for rejecting the KIKO compensation recommendation. Last year, the Financial Supervisory Service (FSS) recommended that KDB pay 2.8 billion KRW to companies affected by KIKO, but KDB refused this recommendation.

Professor Park Seon-jong of Soongsil University, who attended as a witness that day, also mentioned the possibility of errors in the court's judgment at the time.

In response, Chairman Lee said, "We thoroughly reviewed the details ourselves and consulted with a law firm," adding, "We are not guilty of incomplete sales, and since we did our best, we had no choice but to follow the principles."

He also said, "We found traces of speculative behavior rather than sound hedging in the companies that subscribed to KIKO," and "We judged that the parties involved had expertise."

Chairman Lee explained, "If we were to compensate, it would have to be done with taxpayers' money," and "That is why we did not follow the FSS Dispute Mediation Committee's decision."

He further stated, "If we were at fault, we would agree to compensation," and "Regarding the Lime Fund, we acknowledged some fault and agreed to share part of the losses with investors."

Earlier, the FSS Dispute Mediation Committee recommended in December last year that six institutions, including KDB, compensate 15-41% of the losses incurred by companies affected by KIKO. KDB did not accept the FSS committee's recommendation to pay 2.8 billion KRW.

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