2023-10-10 07:32:44
Will the Financial Services Commission and Financial Supervisory Service’s inspection become a ‘hard hit’? Holding company CEO embezzlement failed to be adopted as witness
[대한경제=심화영 기자] All CEOs of major financial companies were excluded from the selection of witnesses for the National Assembly’s Political Affairs Committee audit starting this week. Recently, internal control issues related to financial accidents, such as embezzlement, have emerged, but the appointment of bank presidents as witnesses, including the chairman of the five major financial groups (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup), was not successful.
According to the financial sector on the 9th, the National Assembly’s Political Affairs Committee decided on the 4th to list a list of 30 general witnesses and references as the ‘2023 List of Witnesses and References for the National Assembly Inspection by the Political Affairs Committee’. Financial witnesses included Kim Deok-hwan, CEO of Hyundai Card, Hwang Kuk-hyun, director of the Saemaul Geumgo Federation, and Hong Won-sik, CEO of Hi Investment & Securities. It is said that Hyundai Card was selected as a witness for the National Government Inspection by the Political Affairs Committee due to the Apple Pay fee issue, and the Saemaul Geumgo Federation due to poor internal control rather than transferring supervisory authority to the jurisdiction of the Public Administration and Security Committee.
The Political Affairs Committee will begin with the Financial Services Commission on the 11th, followed by the Financial Supervisory Service on the 17th, government-affiliated public institutions such as Korea Housing Finance Corporation and Korea Credit Guarantee Fund on the 23rd, the Deposit Insurance Corporation, Korea Development Bank, and Industrial Bank of Korea on the 24th, and the Financial Services Commission and Financial Supervisory Service Comprehensive Inspection on the 27th. proceed.
Initially, there were many predictions within and outside the financial world that the chairman of financial holding companies would be summoned one after another as witnesses and references due to issues such as interest trading and internal control. Expectations that the bank president would attend as a witness instead were also defied. In particular, as none of the banking industry officials, such as BNK Kyongnam Bank, DGB Daegu Bank, and KB Kookmin Bank, which caused controversy due to major financial accidents, are listed as witnesses, there are concerns about a harsh government inspection.
During the national inspection period, the chairmen of the five major financial holding companies will attend the International Monetary Fund (IMF) and World Bank (WB) annual general meetings held in Morocco from the 9th to the 15th of this month. An official from the financial holding company said, “We will use this opportunity to continue communicating with investors in Europe through corporate information sessions (IR).”
The analysis is that it does not seem likely that additional witnesses will be adopted until the Financial Supervisory Service audits. In the case of the Financial Supervisory Service’s National Audit, intensive questioning of the Financial Supervisory Service is expected due to the confrontation between the Financial Supervisory Service and the opposition party regarding the ‘suspicion of preferential redemption of Lime Fund’. Previously, the Financial Supervisory Service announced that the Lime Fund had attracted funds from other funds and provided preferential redemption to some influential figures, including multi-elected National Assembly members, just before announcing the suspension of large-scale redemptions in October 2019.
However, there is also speculation that there may be room for additional witnesses related to the issue in the comprehensive audit to be held on the 27th. An official from the Political Affairs Committee said, “The consultation schedule has not been coordinated as it was postponed due to the overseas business trip schedule of the CEO of a financial company, but both the ruling and opposition parties generally agree that places with internal control-related issues should request attendance.” At the general meeting of the Political Affairs Committee on the 4th, Chairman Baek Hye-ryeon of the Political Affairs Committee asked, “During the comprehensive National Assembly inspection, the ruling and opposition party members should discuss internal control witnesses again.”
2022 State Administration Audit / Photo: Yonhap 2023 Political Affairs Committee State Affairs Audit Witness and Reference List / Table: Political Affairs Committee
Reporters Shim Hwa-young and Kim Gwan-ju dorothy@
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