Financial Supervisory Service Appeals Administrative Lawsuit Ruling on Woori Financial Group Chairman

[Asia Economy Reporter Park Sun-mi] The Financial Supervisory Service (FSS) decided on the 17th to appeal the first-instance court ruling that canceled the heavy disciplinary action against Sohn Tae-seung, Chairman of Woori Financial Group.

In January last year, the FSS imposed a heavy disciplinary action of a written warning on Chairman Sohn, who was the head of Woori Bank at the time of the sale of overseas interest rate-linked derivative-linked funds (DLF), holding him responsible for the losses from the DLF incident. Financial institution executives who receive a written warning cannot be employed by financial institutions for three years.

In response, Chairman Sohn filed a lawsuit against the FSS to cancel the heavy disciplinary action, and the court ruled in favor of the plaintiff in the first-instance ruling last month. The court stated that under the Financial Company Governance Act, there is no legal basis for the FSS to sanction financial companies or their executives and employees on the grounds of violating the obligation to comply, rather than the obligation to establish internal control standards.

The FSS's decision to appeal is interpreted to have been influenced by the fact that, although the first-instance court sided with Chairman Sohn, the judgment acknowledged that Woori Bank was somewhat lacking internally in establishing internal control norms. The FSS carefully reviewed detailed matters such as the criteria for determining the obligation to establish internal control standards before deciding whether to appeal.

Meanwhile, political circles and civic groups have pressured the FSS to appeal, arguing that financial institution heads who caused private equity fund damages should not be given a clean slate. On the 14th, 12 members of the National Assembly's Political Affairs Committee from the Democratic Party, including Lee Yong-woo and Oh Ki-hyung, issued a statement saying, "The FSS must appeal and see the judgment on legal misunderstandings through to the end." Civic groups also jointly stated that the FSS must appeal to protect financial consumers.

The FSS's appeal has also turned on a red light for reducing the disciplinary severity for other financial institution executives who received heavy disciplinary actions for similar reasons. This is because, without a legal conclusion, there is no justification to lower the disciplinary level for other financial executives. Woori Financial, which is pursuing the 'complete privatization' process with a target within the year, now faces significant burdens due to the ongoing legal uncertainties.

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