Banking: Korea’s escalating hiring fight could bring down half the industry
Six banks caught up in scandal with another likely to follow.
South Korea has always done scandals very well and its banking sector is in the middle of an absolute doozy at the moment.
On June 17 prosecutors indicted 38 senior officials at six banks for hiring irregularities. There are 695 separate cases of hiring malpractice alleged, 87% of them by officials at either KB Kookmin or KEB Hana; also very much in the mix are Woori, Busan, Daegu and Kwangju banks.
There are some very senior names on the list, among them KEB Hana president Ham Young-joo and former Woori chief executive Lee Kwang-goo, who quit in the early stages of the furore last November.
The authorities went so far as to say they wouldd have KB Kookmin’s head Yoon Jong-kyoo and Hana Financial Group chairman Kim Jung-tai in there too, but they couldn’t find enough evidence. That’s not enough for Kookmin’s notoriously snarling union, which wants Yoon to quit anyway.
The one big local name that is missing – Shinhan – shouldn’t rest easy: prosecutors just say they haven’t finished investigating that bank yet and the Financial Supervisory Service (FSS), the national regulator, said in May it had uncovered 22 cases of suspicious hiring there, 13 of them involving children of key executives.