Chairman of Woori Financial, 'DLF Administrative Lawsuit' First Trial Verdict Today

[Asia Economy Reporter Kim Jin-ho] The first trial ruling on the cancellation lawsuit filed by Sohn Tae-seung, Chairman of Woori Financial Group, against the Financial Supervisory Service (FSS) regarding the disciplinary action on the overseas interest rate-linked derivative-linked fund (DLF) will be announced today.

According to financial and legal circles on the 27th, the Seoul Administrative Court will hold a verdict hearing at 1:50 p.m. today on the cancellation lawsuit filed by Chairman Sohn.

Earlier, in January last year, the FSS imposed a severe disciplinary action, a written warning, on Chairman Sohn, holding him responsible for the DLF incident. At the time of the DLF sales, Sohn was the CEO of Woori Bank.

If a financial company executive receives a severe disciplinary action, they are prohibited from employment in financial companies for the next three years. Accordingly, in March last year, Chairman Sohn filed a cancellation lawsuit against the disciplinary action and also requested a provisional injunction to suspend the disciplinary effect until the ruling was made, which the court granted in his favor.

The key issue in the lawsuit is whether the violation of the obligation to establish internal control standards under the Financial Company Governance Act (Governance Act) can be grounds for severe disciplinary action against a CEO. According to the current Governance Act, "Financial companies must establish standards and procedures (internal control standards) that financial company executives and employees must comply with when performing their duties to comply with laws, manage soundly, and protect shareholders and stakeholders."

The FSS argues that Chairman Sohn's disciplinary action is justified based on this, stating that he failed to establish "effective" internal control standards. On the other hand, Chairman Sohn's side claims that since internal control standards had already been established, disciplining the management for deficiencies is unfair.

The financial sector is paying close attention to the outcome of Chairman Sohn's lawsuit, as it will influence the core issues of disciplinary actions against other financial company CEOs related to private equity funds. The Financial Services Commission also plans to determine the level of sanctions for other CEOs based on the court's ruling.

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