Finance sector braces for shake-up of key posts

Ex-minister Kang heads potential candidates for major private, public institutions


A number of highest-level personnel changes are expected in the financial market during the first quarter of this year, with attention focused on whether President Lee Myung-bak’s confidant Kang Man-soo and other senior bureaucrats land top industry posts.
 
Woori Financial Group, Shinhan Financial Group, Hana Financial Group are likely to appoint new chairmen as early as late February. KDB Financial Group and Export-Import Bank of Korea may also have new chiefs.

Woori, controlled by the state-run Korea Deposit Insurance Corp., plans to launch a nomination committee Friday to choose its next chief as its chairman Lee Pal-Seung will see his term end in March.

While Lee is seeking a second-term, Kang, former finance minister and currently a special advisor to the president on economic affairs, is being mentioned as a candidate for the post.

Kang, 66, who resigned as minister of strategy and finance at the start of 2009, will be eligible for a financial market job in February. The law bars former bureaucrats from seeking private-sector employment in industries influenced by their old jobs within two years of retirement.

There are contradictory reviews of his performance as a former finance minister. Critics blame Kang for his foreign exchange policies in the earlier part of the 2008 global financial crisis, which were based on weakening the won to stimulate exports, which were then blamed for spiking inflation and deteriorating the economic turmoil by weakening the purchasing power of local enterprises.

The issue surrounding Woori’s coming personnel reshuffle may be swayed according to the result of the scheduled privatization of the financial group. Aside from chairman Lee, Woori Bank CEO Lee Chong-hwi will also finish his term this March.

Other candidates for the next Woori chairman include Kim Yong-hwan, senior deputy governor of the Financial Supervisory Service, Kwon Hyouk-se, vice chairman of the Financial Services Commission, and Yun Yong-ro, former CEO of the state-owned Industrial Bank of Korea.
 

However many observers in the market say that the three ― Kim, Kwon and Yun ― are more suitable for the post of governor of the Financial Supervisory Service.

The three-year tenure of incumbent FSS Governor Kim Jong-chang will also terminate in March.

Shinhan, the nation’s third-largest financial group, is set to complete its shortlist of candidates for its vacant chairman position by Saturday.

There is a possibility that former finance minister Kang could be designated as chairman of the group, which is just coming off an internal feud among the former top three executives ― Ra Eung-chan, Shin Sang-hoon and Lee Baek-soon.

Among other competitors are the group’s interim Chairman Ryu Shi-yul, National Pension Fund Chairman Jun Kwang-woo, Shinhan Card Vice Chairman Hong Sung-kyun and Sogang University honorary professor Kim Myung-soo.

One question is who will gain support from Shinhan’s Korean-Japanese shareholders, who have exercised dominance over the group over the past few decades.

While there is also the possibility of the state-run KDB Financial Group bringing in new leadership, Kang is also included in the list for the chairman post.

In addition, President Lee Myung-bak is due to fill the vacancy on CEO of the government-run Export-Import Bank. Many observers pick FSS senior deputy governor Kim and Vice Finance Minister Yim Jong-yong as strong candidates.

One seat of the Bank of Korea’s seven-member Monetary Policy Committee also has been vacant for about nine months since late April.

Though the tenure of Hana Financial Group chairman Kim Seung-yu will also end in several weeks, there is a possibility that he will serve a second-term as the group, initiated by Kim, has applied for regulatory endorsement to take over Korea Exchange Bank.

It is urgent for Hana to find financial investors to make concrete its funding plans ahead of the scheduled M&A with KEB.

By Kim Yon-se (kys@heraldcorp.com)