The prosecution has launched an additional raid related to allegations of improper loans involving relatives of Sohn Tae-seung, the former chairman of Woori Financial Group, on the 18th. The investigation has led to Jo Byung-kyu, the president of Woori Bank, being booked as a suspect.
Recently, the Woori Financial board held a closed session of the Subsidiary CEO Candidate Recommendation Committee (nominations committee) to discuss the appointment of the next bank president. However, with Jo’s booking, the selection process has become uncertain.
According to the financial sector on the 19th, the Seoul Southern District Prosecutors’ Office’s Financial Investigation Division 1 is investigating Jo Byung-kyu concerning the aftermath of alleged improper loans by Sohn. The prosecution conducted a raid on various locations, including Woori Bank’s headquarters loan department, the office of the Woori Bank president, and the office of the Woori Financial chairman. Jo is accused of not reporting the improper loans to financial authorities after taking office, despite being aware of them.
Initially known to be around 35 billion won, the scale of improper loans to Sohn’s relatives is now estimated at approximately 40 billion won, with the prosecution gathering relevant evidence. The Financial Supervisory Service had previously identified 35 billion won out of the 61.6 billion won loaned to Sohn’s relatives from April 2022 to January as improper, preferential loans. The prosecution believes the scale of improper loans is about 7 to 8 billion won more than the Financial Supervisory Service’s estimate.
Jo’s official term ends on December 31 this year. The board needs to draw up a ‘shortlist’ of candidates for the next president by the end of this month. Woori Financial’s directors are being cautious due to ongoing investigations by the prosecution and financial authorities.
Last year, Woori Financial introduced a ‘Bank President Selection Program’ to appoint Jo Byung-kyu as president. In response to internal factional disputes arising from secret appointments, Woori Financial Chairman Lim Jong-ryong introduced an audition-style selection process.
The nominations committee finalizes the list of candidates after conducting external expert in-depth interviews (stage 1), reputation checks (stage 2), and work competency evaluations (stage 3), followed by in-depth interviews (stage 4) to determine the final president candidate.
Some criticize that the ambitious audition selection process by Chairman Lim has become opaque this year due to the improper loan investigation. A Woori Financial representative stated, “It’s not mandatory to disclose the long list,” adding, “Last year, the previous bank president resigned midway, so the group disclosed the long list, but this year the situation is different.”
Meanwhile, potential candidates for the next bank president mentioned within and outside Woori Financial include Park Jang-geun, Woori Bank’s Chief Risk Officer Deputy President; Yoo Do-hyun, Management Planning Group Deputy President; Kim Beom-seok, Domestic Sales Personal Group Deputy President; Ki Dong-ho, Corporate Investment Finance Deputy President; Park Wan-sik, Woori Card CEO; Kang Shin-guk, Woori PE Asset Management CEO; and Lee Seok-tae, Woori Financial Savings Bank CEO.