Saemaeul Geumgo Chairman Kim In-hyun Promotes Executives Under Investigation and Trial

Published 19 Feb.2024 15:07(KST)

Financial Sector Criticizes "Problems in Senior Executive Appointment Methods"
"Concerns Over Management Risks and Decline in External Credibility"

Former and current senior executives of Saemaeul Geumgo, who are under investigation and trial for preferential loans, investment benefits, and bribery allegations, have recently been appointed to key positions in the latest personnel reshuffle.

The Saemaeul Geumgo Central Association announced internal personnel appointments on the 7th for executive-level, headquarters chief, and department head positions. This personnel reshuffle was directed by Chairman Kim In, who took office as the 19th Central Association Chairman last December.

Since Chairman Kim emphasized "responsible management" and "enhancing trust" as his inaugural messages, it was expected that the personnel changes would reflect a commitment to innovation. However, Chairman Kim assigned important roles to individuals who have been indicted by prosecutors or disciplined for misconduct allegations. Notable examples include Shim Dong-bo, appointed as Head of the Fund Structure Improvement Headquarters, and Kang Sang-su, who retained his position as Head of the Ulsan-Gyeongnam Headquarters.

[Image source=Beopryul Newspaper]

They were each sentenced to two years in prison in December last year for collecting money from three full-time directors under the orders of former Chairman Park Cha-hoon, during his tenure as his secretary, and using the funds for congratulatory and condolence expenses. Nevertheless, Chairman Kim appointed Mr. Shim as the head of the newly established Fund Structure Improvement Headquarters, created to promote restructuring or mergers of insolvent funds. Mr. Kang was retained as Head of the Ulsan-Gyeongnam Headquarters. One week after the appointments, on the 14th, they were acquitted in the first trial, and their appointments were confirmed as scheduled on the 16th.

Seo Jeong-do, Deputy Director of the Inspector Supervision 1 Headquarters, who was involved in the ‘congratulatory and condolence expense power abuse’ controversy, was promoted to Director of the Inspection Planning Headquarters. The appointment of senior executives under trial was also the case after former Chairman Park was indicted last year. When Ryu Hyuk, former CEO of the Credit Guarantee Fund, was indicted on charges including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes and suspended from duty, Kim Ki-chang, former Executive Director who had been the second-in-command at the Central Association, was appointed as acting director. However, at that time, Executive Director Kim was also indicted for allegedly paying 78 million won in cash to former Chairman Park. On the 14th, Kim was sentenced to eight months in prison with a two-year probation in the first trial. Immediately after the verdict, it was confirmed that Executive Director Kim, along with Director Hwang Guk-hyun, who was also found guilty, submitted their resignations to the Central Association.

In the financial sector, there is criticism regarding the personnel policy of appointing individuals who have been indicted by prosecutors or internally disciplined to senior executive positions. A representative from a certain pension fund stated, “The decision to retain indicted key executives can lead to management risks for the Central Association as well as a decline in external trust. Since the individuals appointed this time are responsible for consecutive financial accidents and internal control failures, doubts about the leadership’s commitment to organizational innovation inside and outside the fund are inevitable.”