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Kookmin Union Warns of Strike, Urges Bank Executives to Resign

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Aug. 7 (Bloomberg) -- Labor union members at Kookmin Bank, South Korea’s largest lender, said they may go on strike next month and want top executives to resign amid a regulatory probe.

The 17,500-member labor union said it plans to join a financial industry-wide strike on Sept. 3. The action is also intended to press Kookmin Bank Chief Executive Officer Lee Kun Ho and parent KB Financial Group Inc.’s Chairman Lim Young Rok to leave the company, the union said in a statement today.

South Korea’s Financial Supervisory Service is discussing whether to penalize KB Financial executives including Lim and Lee following illicit loans at Kookmin Bank’s Tokyo branch, client data leaks at the lender and a credit-card affiliate, and questions over the process for adopting a new computing system.

“The prolonged procedure at the FSS for penalizing management is hurting morale among employees and raising concerns over management vacancies,” the union said.

The financial supervisor told KB Financial two months ago that it planned to decide the penalties on June 26. The sanctions committee is next scheduled to meet on Aug. 14.

Moon Hye Sook, a spokeswoman for Seoul-based KB Financial, declined to comment on the union’s strike plan and demands for the executives to leave the company.

Members of the Korean Financial Industry Union will vote on Aug. 26 on whether to stop work on Sept. 3, the union said today. The one-day action is to protest against a lack of job security, declining welfare for workers and excessive government influence in the industry, it said in an e-mailed statement.

Kookmin’s union members will try to block Lim and Lee from coming to work from Aug. 11, according to their statement.

“The management came here with little knowledge of the corporate culture and limited industry experience,” union leader Sung Nak Jo said at a news briefing in Seoul today. “There’s no other reason for the difficulties at KB.”

Lee joined Kookmin Bank in 2011 as vice president for risk management after working as a professor at KDI School of Public Policy and Management, an affiliate of the state-run Korea Development Institute. He became CEO last year.

Lim served as vice finance minister until 2008 and joined KB Financial in 2010 as president.

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

To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net Russell Ward, Darren Boey