Financial Authorities in a Dilemma Over Choi In-hyuk Retaining CEO Position at Naver Financial

No Legal Violation but Concerns Over Big Tech Privilege Controversy
Expert: "Exoneration Could Set a Bad Precedent"

[Asia Economy Reporter Kwangho Lee] The ripple effect is spreading to the financial sector as Choi In-hyuk, Naver's Chief Operating Officer (COO) who stepped down from his position at Naver headquarters, decided to retain his role as CEO of Naver Financial. Criticism has arisen over Choi COO’s decision to take moral responsibility for an employee who made an extreme choice due to workplace harassment and to hold the CEO position in the financial industry, where the qualifications for CEOs are stricter than in other sectors. Financial authorities, which have emphasized strict standards for financial company CEOs, maintain that since Naver has not obtained a financial license, there is no legal violation and sanctions are difficult to impose. However, this puts them in a difficult position as the controversy over preferential treatment for big tech companies may resurface.

According to financial authorities and the financial sector on the 29th, Article 5, Clause 1, Item 8 of the Act on the Governance of Financial Companies stipulates that executives should be excluded if there is a risk of harming the public interest, sound management, or credit order of financial companies. This is determined by the Financial Supervisory Service according to the Enforcement Decree of the Governance Act.

Naver Financial, unlike Kakao Bank or Kakao Securities, has not acquired a financial company license but operates in the financial industry. Above all, since financial authorities have opened the financial market to big tech companies, there is a strong voice that shareholder and executive qualification reviews are essential.

A financial sector official criticized, "Maintaining Choi COO’s CEO position at Naver Financial is unthinkable in the financial sector," adding, "An executive who has been disciplined cannot move to another affiliate and take on a CEO role." Another official pointed out, "If financial authorities take a passive stance, they will be criticized," and emphasized, "Strict standards must be applied for supervision and management."

However, financial authorities have yet to release a statement on this matter, citing that it is a corporate moral responsibility and does not violate the law. A financial authority official said, "Since Naver has not obtained a license and has not violated the law, it is not appropriate for financial authorities to judge whether it is proper or improper," and refrained from further comment.

Experts warn that the financial authorities’ passive stance could set a bad precedent of favoring Naver. Professor Seo Ji-yong of Sangmyung University’s Business Administration Department said, "Looking at past cases, if it involved heads of commercial banks or financial companies, financial authorities would have imposed strong sanctions," and pointed out, "If the authorities overlook this Naver incident and grant a pardon, similar incidents are likely to recur." Professor Oh Jung-geun of Konkuk University’s Financial IT Department stated, "Although this is a transitional period with big tech companies entering finance, financial authorities must supervise with standards as strict as those in the financial sector going forward."

Meanwhile, Choi COO recently expressed his intention to take "moral responsibility" related to the death of an employee who suffered workplace harassment and resigned from all positions at headquarters on the 25th. However, he retained his roles as CEO of Naver Financial, CEO of the Happy Bean Foundation, and other affiliate executive positions. In response, the Naver labor union began a picket protest during the morning commute demanding Choi COO’s resignation and the formation of a committee to prevent recurrence. At a press conference the previous day, the union demanded, "Choi COO be dismissed not only as CEO of Naver Financial but also from all executive and CEO positions in all affiliates," and asserted, "He is unqualified to perform duties as a manager not only at Naver but across all affiliates."

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