Woori Finance Holdings Co. Chairman Lee Pal Seung plans to step down ahead of the South Korean government’s fourth attempt to find a buyer for its stake in the country’s biggest financial services group.
Lee, who has been chairman and chief executive officer since June 2008, announced his resignation yesterday without giving a reason for the decision, according to an e-mailed statement from the Seoul-based company. The 69-year-old will continue with his duties until a successor is found, according to a spokesman who asked not to named due to company policy.
Shares of Woori fell today, valuing the government’s stake in the lender at about $4.8 billion. South Korea is preparing a plan to sell its 57 percent holding by June, Financial Services Commission Chairman Shin Je Yoon told lawmakers last month. The government’s three previous attempts to sell Woori Finance starting in 2010 have failed due to lack of buyer interest.
“They will have a new chairman who can get along well with the new administration, which will clearly show the new government’s will for privatization,” Sohn Joon Beom, an analyst with LIG Investment & Securities Co., said by phone. “Still, there’s a bumpy road ahead for privatizing Woori Finance.”
Lee and KB Financial Group Inc. Chairman Euh Yoon Dae are among executives who were appointed to run finance companies during the tenure of South Korea’s ex-president Lee Myung Bak. Park Geun Hye, who became South Korea’s first female president in February, asked cabinet members on March 11 to appoint new chiefs at companies affiliated with the government who share her administration’s vision.
FSC’s Shin echoed the sentiment on April 4, when he said Woori needs a chief who shares the government’s will and philosophy for privatization, according to an e-mailed statement by the regulator.
Shares of Woori declined 0.4 percent to 11,700 won in Seoul trading, compared with the benchmark Kospi index’s 0.2 percent drop. The stock has fallen 5.7 percent in the past year.
Lee joined the company in 1967, and oversaw the government’s divestment of 17 percent of Woori since becoming chairman five years ago through block sales, according to the statement. His second, three-year, term as head of the company was set to end in March.
“I heartily support the early privatization of Woori Finance for the development of South Korea’s financial industry,” Lee said in the e-mailed statement.
Woori’s current structure was created in 2001 as a holding company for banks rescued by the government following the Asian financial crisis in 1997-1998, as part of a push to make the industry more competitive.
The government’s attempts to sell its shares in Woori have met with opposition from labor unions. The Korean Financial Industry Union, which includes Woori employees, last year announced plans for its first nationwide strike in more than a decade, saying the government should sell the stake publicly to individual investors rather than pursue consolidation with other firms. The union dropped the plan after the sale failed.