Kim Ji-wan, Chairman of BNK Financial Group, Set to Resign with 5 Months Left in Term

'Allegations of Favoritism Toward Children' Ruling Party and Authorities Pressure... Interest in Recruiting Outsiders as Next Chairman

[Asia Economy Reporter Yu Je-hoon] It has been reported that Kim Ji-wan, chairman of BNK Financial Group, will resign five months before the end of his term. BNK Financial is currently under inspection by regulatory authorities due to allegations of preferential treatment related to Chairman Kim’s children, and political circles are continuing to pressure him to resign for this reason.

According to the financial sector on the 3rd, Chairman Kim conveyed his intention to resign to BNK Financial’s outside directors last week. Since his inauguration as chairman in 2017, Kim succeeded in one reappointment but will step down before completing his term scheduled to end in March next year.

Earlier, at the National Assembly’s Financial Services Committee audit held on the 11th of last month, ruling party lawmakers raised suspicions of preferential treatment, claiming that Hanyang Securities, where Chairman Kim’s son worked, was selected as a bond underwriting group for bonds issued by BNK Financial’s affiliates and purchased a large volume of bonds. Accordingly, the Financial Supervisory Service has been conducting an on-site inspection since the 18th of last month.

Within the industry, there are considerable concerns that Chairman Kim’s resignation might cast the shadow of government control (官治) over the financial sector once again. Kim is an external figure who has served as president of Bukuk Securities, Hyundai Securities, and Hana Daetoo Securities, and he was also a fellow alumnus of Busan Commercial High School with the late former President Roh Moo-hyun.

Meanwhile, BNK Financial is expected to begin serious discussions on appointing the next chairman. According to BNK Financial’s CEO succession regulations, the chairman can be selected from among the holding company’s inside directors, the holding company’s chief operating officers, or subsidiary representatives. Industry insiders mention internal candidates such as An Gam-chan, president of Busan Bank, and Lee Doo-ho, president of BNK Capital.

However, some also believe there is a considerable possibility that an external candidate will be appointed again. BNK Financial has internal regulations allowing external personnel and retired executives to be included in the pool of chairman candidates in cases where the CEO causes social controversy.

The National Financial Industry Labor Union stated in this regard, “BNK Financial Group reasonably amended its CEO succession regulations and internal succession principles in 2018, and just as the fruits of these changes are about to be realized, the ruling party lawmakers’ criticism of the closed nature of the succession process and the subsequent movements of the board of directors cause deep concern for the financial labor union.” They added, “The board of directors should stop smiling at the changed power like sunflowers, selling the conscience of scholars and experts, and opening the door for parachute appointments. The Financial Supervisory Service should also refrain from exerting any pressure on the board.”

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