The nation’s two financial watchdogs appeared to be at odds over a recent policy decision to issue lighter-than-expected sanctions on KB Financial Group executives.
The state-run Financial Services Commission last week handed down “cautions” on KB Financial Group chairman Lim Young-rok and KB Kookmin Bank president Lee Kun-ho for their roles in a string of irregularities at the group and bank, including data leaks, loan fraud and a spat over replacing the bank’s computer system.
Expressing dissatisfaction with the move, Choi Soo-hyun, head of the Financial Supervisory Service ― the privately run administrative arm of the FSC ― requested legal reviews on the sanctions, which triggered speculation that he hoped to overturn the results.
As the head of the FSS, Choi holds the legal right to veto the decisions made by the FSC.
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| FSS Gov. Choi Soo-hyun. (Yonhap) |
“Choi has called for professional legal consultation on the committee’s decision to make sure it was based on proper regulatory standards,” Park Se-choon, the FSS assistant vice governor, said Thursday.
The financial industry had been bracing for harsher penalties on Lim and Lee, as the FSS had signaled in May.
The penalties that were decided by its advisory committee, the FSC, however, were much lighter, and would have no direct impact on the two top officials’ current position.
Choi did not comment immediately after the Aug. 21 announcement.
Meanwhile, the FSS so far has no history of vetoing the FSC’s decisions.
“The disciplinary committee has held six meetings since June, but appears to be still caught up in the documentation and petty details. All of this will have to be reviewed, therefore we believe it would take some time before the governor reaches a decision (on whether to issue a veto),” an FSS official said.
This is not the first time that the two watchdog divisions have argued over sanctions and policy directions. The FSS in most cases seeks harsher penalties.
The FSC, meanwhile, recently announced that it would not issue unnecessarily stringent punishment on financial executives, as such measures may harm the sector’s business sentiment.
By Bae Hyun-jung (tellme@heraldcorp.com)
