이 기사는 2021년 03월 23일 08:06 thebell 에 표출된 기사입니다.

The Financial Supervisory Service (FSS) held its second sanctions committee meeting Thursday to decide the level of punishment for Woori Bank, Shinhan Financial Group and Shinhan Bank for poor management in their selling of unsound products of scandal-ridden Lime Asset Management last year, but failed to make any decision, according to industry sources.

The meeting was held to give the financial firms a chance to explain or defend themselves before finalizing punitive actions. Son Tae-seung, chairman of Woori Financial Group, didn’t appear after Woori Bank had an eight-hour meeting last month.

Shinhan Bank CEO Jin Ok-dong actively defended himself and the bank for more than four hours. Shinhan Bank reportedly emphasized that inadequate internal control can’t be the basis for severe disciplinary action on CEO. It also claimed that the provisions of the Governance Structure Act that “there should be standards for internal control” cannot be a direct basis for imposing sanctions on management in the event of a financial incident.

On the contrary, the FSS is holding Son and Jin responsible for poor supervision of the lenders' sales of troubled funds. The financial watchdog had sent prior notice of tough sanctions to them ahead of its first sanctions committee meeting held in February. Jin received a reprimand warning that would restrict him from getting a new job in other financial companies for the next three years if the sanctions are confirmed at the meeting.

For Shinhan Financial Group, the issue was whether it was possible to punish the group chairman based on Shinhan’s organizational structure, “matrix system.” The matrix system merges similar services operated by the group's subsidiaries to streamline corporate structure and remove redundancies. Cho Yong-byung, Shinhan Financial Group chairman, who received a lighter cautionary warning, also attended the meeting.

The FSS said that Shinhan Financial Group is responsible for managing its branches such as Shinhan Private Wealth Management centers where Lime’s unsound funds were also sold.

Woori Bank reportedly sold the largest amount of the troubled funds estimated to be worth 357.7 billion won ($316 million), while Shinhan Financial Investment, a wholly-owned subsidiary of Shinhan Financial Group, sold 324.8 billion won and Shinhan Bank sold 276.9 billion won.

The FSS is expected to hold its third sanctions committee meeting on April 8. (Reporting by Min-young Kim)