Yoon Jong-won "Fund Scandal Was Difficult... Compensation for Losses Through FSC Mediation Process" (Comprehensive)

Focus on Supporting Small and Medium Enterprises and Small Business Owners to Overcome the COVID-19 Crisis This Year

[Asia Economy Reporter Park Sun-mi] "There were difficulties due to past issues such as anti-money laundering and private equity fund problems. It was also challenging to constructively resolve labor-management relations."

Yoon Jong-won, President of Industrial Bank of Korea (IBK), made these remarks during a written press conference held online on the 18th to mark his first anniversary in office, reflecting on the challenges faced over the past year.

Regarding the Discovery Fund incident, President Yoon clearly stated his position to proceed with loss compensation through the Financial Supervisory Service's (FSS) Dispute Mediation Committee process. He emphasized securing objectivity first through the FSS dispute mediation procedure to ensure that private settlements do not constitute breach of fiduciary duty.

Private settlement refers to a method where financial companies and victims autonomously negotiate and decide the compensation level. Last year, IBK conducted meetings with Discovery Fund customers and, to alleviate customer inconvenience due to deferred payments, became the first bank to prepay 50% of the principal investment.

President Yoon said, "For private settlements not to be considered breach of fiduciary duty, the ‘principle of self-responsibility’ stipulated in financial investment laws must be observed. To carry out private settlements based on this principle, securing objectivity regarding the scope of responsibility between parties is crucial." He added, "I believe it is a reasonable approach to proceed with loss compensation through the FSS Dispute Mediation Committee process, which guarantees objectivity. We plan to sincerely engage with the Dispute Mediation Committee going forward to minimize customer damages."

President Yoon also emphasized that IBK has established measures to prevent recurrence of the Discovery Fund incident. He stated, "To protect financial consumers and prevent recurrence, we separated and made independent the Financial Consumer Protection Group, established a customer-centric asset management control tower, reorganized the organization, and strengthened internal control procedures." He added, "We improved the entire process of product selection, sales, and post-management to prevent incomplete sales, and plan to introduce a voice bot recording system early next month."

This Year’s Focus: Overcoming the COVID-19 Crisis and Realizing Innovation Management Results

President Yoon said that this year, the bank will focus on supporting small and medium-sized enterprises (SMEs) and small business owners in overcoming the COVID-19 crisis.

Over the past year, approximately KRW 25 trillion was newly supplied to SMEs and small business owners, along with support to ease repayment burdens such as interest deferrals and maturity extensions. President Yoon said, "For companies whose interest and principal deferrals are ending, we plan to operate a COVID-19 soft-landing support program that includes installment payment of deferred interest, loan repayment deferrals, and loan interest rate reductions to ease repayment burdens." He added, "We will continue tailored financial support for companies affected by COVID-19 this year, and strengthen support for financial structure stabilization and business restructuring for a post-COVID-19 rebound."

Furthermore, over the next five years, the bank plans to supply KRW 20 trillion in loans and KRW 5 trillion in investments to New Deal companies, and provide digital and green transition consulting to more than 1,000 SMEs. ESG (Environmental, Social, and Governance) management will be focused on leading eco-friendly and climate crisis responses (E), fulfilling social responsibilities as corporate citizens (S), and aiming for sound governance management (G).

He also expressed his intention to foster a mature labor-management culture.

President Yoon said, "To resolve the issue of voluntary retirement, the labor and management of the policy bank are jointly seeking improvement measures and continuously discussing with the government." He added, "However, the employee recommendation director system or labor director system is a matter with both expectations and concerns, and requires amendments to related laws to be implemented. Outside directors are appointed according to current legal procedures such as the Industrial Bank of Korea Act, and we plan to propose multiple candidates in March."

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