Breaking News

German November IFO Confidence at 104.7; Median Forecast 103.0
Tweet TWEET

KB Financial Executives Offer to Quit Over Leaks, Official Says

Top executives at KB Financial Group Inc. (105560) and its Kookmin Bank and credit card units offered to resign as South Korean regulators investigate leaks of client information, a KB Financial official said.

A total of 27 executives including Kookmin Bank Chief Executive Officer Lee Kun Ho and KB Kookmin Card Co. CEO Shim Jae Oh sent resignation letters to KB Financial CEO Lim Young Rok today, the official said, asking not to be named, citing company policy. Lim hasn’t decided whether to accept the offers, the official said.

The Financial Supervisory Service said yesterday that it began probing operations at Kookmin Bank, the nation’s largest lender, in relation to client data leaked at the card unit. Prosecutors earlier this month indicted three people for allegedly selling information of customers at KB Kookmin Card, Lotte Card Co. and Nonghyup Bank’s card division.

The three credit card companies issued statements on their websites today expressing regret for the breaches and their CEOs bowed in apology at a briefing broadcast on the YTN cable news network. Later today, Nonghyup Bank card division chief Sohn Kyoung Ik resigned, according to an e-mailed statement from the Seoul-based lender.

Ten of the resignation offers at KB Financial were from executives at the parent company, eight were from Kookmin Bank and nine were from KB Kookmin Card, the KB official said.

Take Responsibility

“We feel deeply guilty and ashamed for losing clients’ trust following this accident,” KB Kookmin Card CEO Shim said in the televised briefing this morning. “We’ll take all legal and moral responsibility,” although there haven’t been any reported cases of the information being abused, Shim said.

The FSS started inspecting local units of Citigroup Inc. and Standard Chartered Plc on Jan. 17 after prosecutors last month found that their customer information was also leaked, the agency said in yesterday’s statement.

The Financial Services Commission formed a taskforce on Jan. 17 to find ways to ensure financial institutions properly protect personal data. FSC Chairman Shin Je Yoon last week called for a meeting with heads of financial groups.

The regulator will hold top managers responsible for such incidents and will take stern action to avoid a repetition, Shin said on Jan. 14, calling the leaks a “severe crime that shakes the foundation of the financial industry.”

The three card companies whose information was leaked aren’t publicly traded. Shares of KB Financial fell 0.1 percent to 39,050 won at the close in Seoul after declining as much as 1.8 percent.

While there’s no evidence that the leaked information has been misused, the card companies will fully compensate victims for any damage, Shin told reporters today, according to an e-mailed statement from the commission. The regulator will consider revising rules to seek stricter punishment including fines, according to the statement.

To contact the reporter on this story: Seonjin Cha in Seoul at scha2@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.