Court Suspends Disciplinary Action Against Hana Financial Vice Chairman Ham Young-joo Over 'DLF Incident'

Ham Young-joo, Vice Chairman of Hana Financial Group / Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Kim Daehyun] The disciplinary action against Ham Young-joo, Vice Chairman of Hana Financial Group, related to the overseas interest rate-linked derivative-linked fund (DLF) loss incident, will be suspended until the appellate court ruling on the cancellation lawsuit of the disciplinary action is issued.

On the 24th, the Seoul High Court Administrative Division 4-1 (Presiding Judges Kwon Ki-hoon, Han Gyu-hyun, Kim Jae-ho) accepted Vice Chairman Ham's request and decided to suspend the execution (suspension of effect) of the reprimand warning. The court accepted Vice Chairman Ham's side's request, stating, "Since the disciplinary action by the financial authorities would cause irreparable damage, please suspend its effect."

Previously, the financial authorities found that Hana Bank had committed improper sales of DLF and imposed a six-month partial suspension of business (new sales of private funds) and a fine of 16.78 billion KRW on Hana Bank on March 5, 2020.

DLF refers to funds investing in derivative-linked securities (DLS) based on underlying assets such as interest rates, exchange rates, and credit ratings. In the second half of 2019, bond interest rates worldwide plummeted, causing principal losses in DLS based on US, UK, and German bonds and the DLFs investing in them.

At the time of the DLF loss incident, Vice Chairman Ham, who was serving as the bank president, also received a heavy disciplinary action (reprimand warning) for inadequate management and supervision. Disciplinary actions of reprimand warning or higher restrict reappointment and employment in the financial sector.

Hana Bank and Vice Chairman Ham filed administrative lawsuits and requested suspension of execution, objecting to the disciplinary actions. The court accepted the suspension of execution, acknowledging the possibility of disputing the legality of the disciplinary action, but ruled in favor of the financial authorities in the main lawsuit.

The Seoul Administrative Court Administrative Division 5 (Presiding Judge Kim Sun-yeol) ruled against Vice Chairman Ham and Hana Bank in the cancellation lawsuit against the financial authorities' business suspension and other disciplinary actions on the 14th.

At that time, the court stated, "The scale of losses due to improper sales is enormous, and the plaintiffs' disregard for investor protection obligations while pursuing corporate profits betrays the bank's public nature, safety, trust, and integrity," adding, "The executives need to take corresponding responsibility."

Vice Chairman Ham, dissatisfied with the loss ruling, filed an appeal and again requested suspension of execution.

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