KB Financial Group chairman Euh Yoon-dae has seemingly been successful in resolving the recent conflict between management and outside directors.
Euh was tackling a false allegation ― raised by a KB Financial senior executive ― that some outside directors dispatched by financial authorities sought to block KB Financial from taking over ING Life Korea.
Foreign investors were informed of the allegation, which had not been verified, via a report by the U.S.-based Institutional Shareholder Services Inc.
Euh dismissed the senior executive Park Dong-chang, the KB chief’s close aide as deputy president and chief strategy officer, at an extraordinary board meeting Monday.
Park is suspected of leaking the false information to the ISS, a global provider of corporate governance solutions.
Hosting another extraordinary board meeting on Wednesday, Euh grappled to placate the angry directors, stressing that the management has delivered its position to foreign investors that the information was baseless.
As foreign investors hold a 65 percent stake in the second-largest financial firm in Korea, the coming shareholders’ meeting, slated for this Friday, is drawing wide interest amid the internal conflict.
It seems that the dismissed executive had sought to oust the outside directors by mobilizing the influential power of foreign institutional investors.
The vote to decide on extending the terms of the outside directors will be carried out at Friday’s shareholder meeting.
Market observers widely share the view that the fate of Euh will be determined by the vote.
If the foreign investors vote for the incumbent directors, Euh could maintain his top management position, settling down the recent conflict.
Should the investors highlight the issue again by casting rejection ballots, Euh may come under pressure to resign.
Euh has been regarded as one of several beneficiaries in the financial market under the Lee Myung-bak administration, which ended in February.
In December 2012, KB Financial Group dropped its bid to buy ING’s Korean life insurance unit after meeting strong opposition from its board.
By Kim Yon-se (
kys@heraldcorp.com)
