The board of KB Financial Group Inc. decided Wednesday to sack the group's chairman accused of a series of management lapses, clashing head-on with the chief who said he has no intention to step down.
The board's move came after KB Financial chairman Lim Young-rok refused to accept its recommendation Monday that he voluntarily resign to allow the banking group to get past recent controversies over his conduct and resume normal business operations.
Lim denies any wrongdoing and rejected the board's call. On Tuesday, he sued the financial regulator that had suspended him.
Lim, who took the helm of the country's No. 2 banking group by market value in July 2013, has come under mounting pressure to resign over a series of scandals such as massive data leaks and illegal loans.
More recently, the banking group has been embroiled in an ugly internal feud over a change of computer system at its mainstay banking unit, Kookmin Bank.
In April, the bank's board approved the expensive transition to a new computer system, based on reports compiled by the bank that were full of fabricated information.
The reports underestimated the risks of the system change and scaled down the related expenses, according to the Financial Supervisory Service (FSS), the country's financial watchdog.
Lim and three other executives were negligent in overseeing the change of computer system, the watchdog said.
Last week, the country's financial regulator, the Financial Services Commission (FSC), suspended Lim for three months, the second-highest penalty after immediate dismissal.
The FSS had censured Lim and Kookmin Bank president Lee Kun-ho, but the regulator upped the level of punishment, citing the gravity of their misconduct. By law, only the regulator, the FSC, can finalize the punishment of CEOs of financial groups.
Kookmin Bank chief Lee resigned after being sanctioned, but Lim insisted he did nothing wrong in handling the computer system change and vowed to take all possible measures to clear his name, including legal action.
On Tuesday, Lim filed a suit with a Seoul administrative court against the regulator to nullify the suspension.
The FSC has been going all-out to oust Lim from his post by lodging a complaint with the prosecution against Lim and other executives over irregularities in the computer system transition.
The FSS has also made its own moves, dispatching supervisors to KB affiliates to monitor their management and business operations. (Yonhap)
