Hana Financial Group Chairman's Guilty Verdict Raises Judicial Risk... Heightened Sense of Crisis

Guilty Verdict in Hiring Corruption Second Trial... Supreme Court Appeal Announced
Lawsuit Over Dismissal Cancellation Related to DLF Sales Also Pending

Ham Young-joo, chairman of Hana Financial Group, was found guilty in the appellate trial related to allegations of hiring irregularities. While the judicial risk seemed to have been resolved when he was acquitted in the first trial, the reversal of the verdict has heightened concerns. If a guilty verdict is issued by the Supreme Court before March 2025, it is uncertain whether he will be able to complete his remaining term before seeking reappointment.

On the 23rd, the 1st Criminal Appeals Division of the Seoul Western District Court (Presiding Judge Woo In-seong) sentenced Chairman Ham, who was indicted on charges of obstruction of business and violation of the Equal Employment Opportunity Act, to six months in prison with a two-year probation and a fine of 3 million won. This overturned the not guilty verdict from the first trial.

Ham was indicted in June 2018 on charges of obstructing the selection process of successful candidates in the document screening stage by instructing the HR department to give preferential treatment after hearing from a senior official at Kookmin Bank that his son had applied to Hana Bank during the 2015 open recruitment while he was the bank president. He was also charged with violating the Equal Employment Opportunity Act by ordering the HR department to maintain a male-to-female ratio of 4 to 1 ahead of the 2015 and 2016 open recruitments.

The court explained, "It is judged that Chairman Ham was involved in the selection of successful candidates for the group interview, and he appears to have been involved in the unbalanced gender ratio in the hiring of new employees in violation of the Equal Employment Opportunity Act," adding, "The fact that the defendant’s personal interests were not directly connected is a favorable circumstance."

With this verdict overturned, Chairman Ham’s judicial risk has resurfaced. Depending on the Supreme Court’s ruling, not only reappointment but even completing his current term could become problematic. According to the Act on the Governance of Financial Companies, anyone sentenced to imprisonment or higher cannot serve as an executive of a financial company. If a guilty verdict is issued by the Supreme Court before Ham’s term ends in March 2025, he will not be able to continue as chairman.

After the trial, Ham told reporters, "I respect the court’s judgment," but added, "I will appeal and seek a new judgment."

However, this is not the only legal battle Ham is involved in. There is also an ongoing lawsuit to cancel disciplinary action related to the sale of overseas interest rate-linked derivative-linked funds (DLF). Previously, Ham received a severe disciplinary warning from financial authorities in 2020 regarding the DLF sales. Receiving such a warning prohibits reappointment and restricts employment at financial institutions for three years. He filed a lawsuit to cancel the disciplinary action but lost in the first trial in March last year. The second trial verdict is expected on January 25 next year. If Ham ultimately loses this lawsuit, he will become the first chairman in the history of Hana Financial Group to fail in securing reappointment.

[Image source=Yonhap News]

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