South Korean Regulator to Sue KB Financial Chairman After LapsesRose Kim
A South Korean regulator will sue KB Financial Group Inc.’s top executive after management lapses at the nation’s second-biggest banking group by market value.
The Financial Supervisory Service will sue key people related to alleged “illegal and unjust actions,” including KB Financial Chairman Lim Young Rok, on Sept. 15, according to an e-mailed statement today. The FSS and the Financial Services Commission held an emergency joint meeting today on KB’s situation, according to the statement.
The regulator’s decision comes a day after the FSC announced Lim will be suspended for three months for mishandling changes to a computer system at KB’s Kookmin Bank unit. Lim vowed to consider all possible measures to defend himself, including legal action, saying the FSC’s decision was “hard to accept.”
Seoul-based KB and Kookmin have faced months of scrutiny over matters ranging from the computer issue to client data leaks and illicit loans in Japan.
The FSS said on Sept. 4 that Lim and Kookmin Chief Executive Officer Lee Kun Ho failed to adequately supervise the process for the computer-system overhaul. Lee resigned after the FSS reprimanded him.
Some Kookmin executives reported false or misleading information on test results of candidates for the new system and the expected costs of the shift, which could exceed 200 billion won ($193 million), the watchdog said.
Lim said on Sept. 10 that the company’s operations aren’t at risk because it hasn’t yet made a decision on changes to the computer system. He served as the country’s vice finance minister until 2008 before joining KB as president in 2010, according to a company regulatory filing.