The merger of Hana Financial Group’s two flagship banks, Hana Bank and Korea Exchange Bank, is expected to face further delays as the management and labor failed to reach a last-minute agreement.
The financial group recently decided to go ahead with the merger, with or without the KEB labor union’s consent, a move that deepened the latter’s resistance.
The Financial Services Commission was scheduled to discuss the issue at its regular meeting next Wednesday but decided to postpone action due to the management-labor deadlock, FSC officials said Friday.
The next regular meeting is slated for Feb. 11, meaning the commission’s preliminary approval will be issued next month at the earliest, and that the actual integration process will likely be delayed. The current due date set by Hana Financial’s management is March 1.
Management and labor had seemed to be making progress when the former proposed promoting some 3,400 nonregular employees to regular posts within one month after the merger. But the union refused the deal.
Nonetheless, the company adopted a tougher stance and decided to push ahead with the procedure, pressured by FSC chairman Shin Je-yoon.
“We have long waited for the labor-management agreement and there is now little time left,” Shin said at the parliamentary state affairs committee earlier this month.
The KEB labor union retaliated by applying for a court injunction, calling the forceful merger illegitimate and demanding that the company terminate the merger preparations.
“Hana Financial is trying to cover up its management errors by merging the two banks and expanding the size of its business,” said an official of the KEB labor union.
The union argued that ongoing investigations involving either Hana Bank or KEB may become obstacles to a hasty merger.
“It is appropriate to delay the earlier-than-expected merger until financial authorities draw a final conclusion on the Moneual loan fraud case,” said Jun Sung-in, professor of economics at Hongik University, at a KEB union-hosted forum on Thursday, referring to a scandal that plagued the bank last year.
Hana Bank was also involved in a massive loan scam last year.
By Bae Hyun-jung (tellme@heraldcorp.com)
