Son Tae-seung, Chairman of Woori Financial Group, Wins Final Victory in 'Disciplinary Cancellation Lawsuit'

Both 1st and 2nd Instance Courts Rule in Favor of Chairman Son... Financial Supervisory Service Appeals
Supreme Court: "Establishing Internal Control Standards, Partial Non-Compliance Cannot Be Grounds for Disciplinary Action"

Son Tae-seung, Chairman of Woori Financial Group

[Asia Economy Reporter Heo Kyung-jun] Sohn Tae-seung, Chairman of Woori Financial Group, has won the final verdict in a lawsuit challenging disciplinary actions related to overseas interest rate-linked derivative-linked funds (DLF).

The Supreme Court's 2nd Division (Presiding Justice Lee Dong-won) on the 15th upheld the lower court ruling in favor of Chairman Sohn in the appeal trial of the cancellation lawsuit against the Financial Supervisory Service (FSS) Governor's disciplinary warning.

The FSS confirmed that there was incomplete sales during the process of launching and selling DLFs at Woori Bank and issued a severe disciplinary action, a 'disciplinary warning,' to Chairman Sohn, who was the bank president at the time, citing responsibility for internal control. Disciplinary actions of a warning or higher restrict reappointment and employment in the financial sector. In response, Chairman Sohn filed an administrative lawsuit in March 2020 seeking cancellation of the disciplinary action.

The first trial court ruled that "the FSS misunderstood the law and constituted the grounds for the disposition beyond the scope permitted by law," and ordered the disciplinary action against Chairman Sohn to be canceled. The second trial court mostly upheld the first trial's judgment and ruled in favor of Chairman Sohn. The FSS appealed, stating it could not accept the second trial's judgment.

The Supreme Court also agreed with the lower courts' judgment. Under current laws, there is no legal basis to impose sanctions for violations of the obligation to 'comply' with internal control standards of financial companies, and violations of the obligation to 'establish' internal control standards and violations of the obligation to 'comply' with internal control standards must be distinguished.

The court stated, "Once internal control standards are established, even if some parts of those standards are not complied with, this cannot be considered grounds for disciplinary action."

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