Three Straight Hard-Hitting Remarks from 'Mr. Bitter Truth' Chairman Donggeol Lee Since the Beginning of the Year (Comprehensive)

Final Ultimatum to Ssangyong Motor Labor and Management: "Additional Support Only If Two Preconditions Are Met... Last Chance"
Criticism of National Pension Opposition to Korean Air-Asiana Merger
Financial Supervisory Service's KIKO Compensation Judgment: "Populist... Compensation Impossible"

[Asia Economy Reporter Kangwook Cho] "This is the last chance. If it fails again, that’s the end."

‘Mr. Harsh Words’ Lee Dong-geol, Chairman of KDB Industrial Bank of Korea, sent a stern final ultimatum to the Ssangyong Motor labor and management who filed for corporate rehabilitation procedures. Known for his blunt and straightforward remarks not only to the business community but also to labor unions and political circles, Chairman Lee raised his critical voice not only against Ssangyong Motor but also against the National Pension Service and the Financial Supervisory Service.

In particular, he directly opposed Yoon Seok-heon, Governor of the Financial Supervisory Service, calling the FX derivative product KIKO compensation issue?a matter on which Yoon has focused most since his inauguration?a populist judgment, setting up a confrontation.

Demand for Extension of Collective Agreement from 1 Year to 3 Years and Documented Suspension of All Disputes Until Profitability at Ssangyong Motor

At the New Year press conference held online on the 12th, he reiterated that the ongoing negotiations for new investment between the current major shareholder Mahindra Group and potential investors represent the ‘last chance.’

Regarding additional support from KDB, he set two preconditions: to extend the collective agreement contract from one year to three years, and to sign a memorandum pledging to suspend all labor disputes until the company returns to profitability.

Chairman Lee emphasized, "I have seen many cases where restructured companies harm themselves by striking every year and causing production disruptions before normalization," adding, "There must be absolutely no self-harm caused by discord between Ssangyong Motor’s labor and management."

He warned, "If these two preconditions are not met, I will not provide even a single won of support." However, he added, "This is not to oppress the labor union unilaterally, but a last-ditch request to save Ssangyong Motor."

Enhancing Shareholder Value in Korean Air-Asiana Merger... "National Pension Service’s Justification for Exercising Shareholder Rights Fades"

Chairman Lee also criticized the National Pension Service (NPS) for expressing opposition regarding the Korean Air-Asiana Airlines merger. He evaluated that the NPS’s justification for exercising shareholder rights has diminished.

He pointed out, "It is inevitable to have doubts about the opposition to the merger when the NPS’s share value is expected to increase through the integration of the two airlines," and added, "The NPS’s claim that this merger could be disadvantageous to Korean Air lacks grounds." He further explained, "There have been criticisms about whether the NPS’s decision to exercise shareholder rights was made rationally," but "I do not believe KDB’s justification has faded or the importance of the matter has diminished."

"Is the Financial Supervisory Service Above the Law?"... Criticism of KIKO Compensation as "Populist Judgment"

Regarding the FX derivative product KIKO compensation issue, Chairman Lee stated, "I believe there is no need to compensate, no reason to do so, and compensation should not be made."

He cited three reasons for refusing compensation: ▲lack of legal understanding of the judgment ▲the matter being legally concluded ▲doubts about the victim company.

Chairman Lee first said he could not understand the Financial Supervisory Service’s judgment. He said, "It is difficult to accept the claim of mis-selling legally," and added, "The Financial Supervisory Service’s assertion of mis-selling is more of a populist judgment than a logical one, so compensation is impossible."

He also criticized, "Overturning a court decision in a legally concluded case could remain a very bad precedent in South Korea’s financial history," calling it "undesirable."

He then said, "Until the court itself reverses the decision, it is right to follow the original ruling," and sharply stated, "Is the Financial Supervisory Service above the law? The idea that ‘only the line I enforce is right’ is a very dangerous thought."

Chairman Lee also raised questions about Ilseong Hysco, which claims to be a victim company and a counterparty of KDB.

He said, "Ilseong Hysco is an expert company that earned a total of 3.18 billion won, averaging 800 million won annually, through KIKO transactions from 2004 to 2007," and added, "The proportion of KIKO profits to net income increased from the 10% range to over 40%, showing that it indulged in derivative financial products as much as its main business. It is unacceptable to claim mis-selling just because it suffered losses in the last transaction."

In particular, Chairman Lee questioned, "We should worry about the future and leave the past behind. If we keep dwelling on the past, when will we do new things?"

Meanwhile, Chairman Lee expressed opposition to the amendment of the KDB Act, which adds ‘employment stability and promotion’ as a purpose of KDB’s establishment, saying, "If employment stability is fixed, restructuring will become difficult. In-depth discussions are necessary."

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