The state-controlled KDB Financial Group has shifted its policy direction under the Park Geun-hye administration away from privatization.
The future business policies of KDB Financial can be seen via the inaugural speech of its new chairman Hong Ky-ttack, who took office this week.
Hong said the financial group would bolster its long-standing role as the nation’s leading provider of policy loans for state projects.
His remarks could mean that the Park government has scrapped the earlier project of former chairman Kang Man-soo and the Finance Ministry to dispose of public agencies’ stake in KDB Financial within several years.
Hong said Korea had lost the momentum for privatization of KDB Financial “due to a worsening situation in the global economy.”
Arguing that it was essential to expand amid the changed situation at home and abroad, he said that enhancing the group’s state-financier role would ultimately lead to greater competitiveness.
He stressed that “KDB Financial will continue to take on the role of big brother” among several state-run firms such as the Korea Finance Corp. and the Export-Import Bank of Korea.
About a year ago, former chairman Kang unveiled the stake disposal project, which would be carried out through the group’s planned listing ― or pushing for an initial public offering ― on the stock market.
Finance Ministry officials as well as Kang had mapped out step-by-step procedures to sell the entire government-stake in KDB Financial before 2015.
The plan included a 10 percent stake sale by 2012, 30 percent by 2013 and the remaining 40 percent by 2014.
The Korea Finance Corp. holds a 90.3 percent stake and the Finance Ministry 9.7 percent in the financial group.
Over the past several decades, the group’s flagship Korea Development Bank has played a significant role in funding a great number of enterprises and supporting the corporate sector’s advancement into overseas markets.
When private financial companies have suffered difficulties, KDB has often bailed them out in collaboration with financial regulators.
Meanwhile, new chairman Hong will maintain his position as economics professor at Chung-Ang University as he applied for a three-year leave of absence, choosing not to tender his resignation.
His annual salary as the KDB Financial chairman is estimated to be as much as 500 million won ($439,000).
Born in Seoul in 1952, Hong worked as an economist at the Bank of Korea, an outside director for Samsung Card and Nonghyup Financial group, and professor at Chung-Ang University after graduating from Sogang University in 1975.
He also was a member of President Park’s economic think tank before her inauguration. He also served as a member of the economic team under the transition committee.
By Kim Yon-se (
kys@heraldcorp.com)
