For Bank's Sales of Lime Fund Products
The Financial Supervisory Service (FSS) has notified the former CEO of Woori Bank of its intention to suspend him from his duties for the bank’s sales of controversial fund products from Lime Asset Management in 2018 and 2019.
The bank's CEO at the time was Sohn Tae-seung, currently chairman of Woori Financial Group. Yet even if Sohn receives a suspension of duties as president of Woori Bank, he is expected to be able to retain his current post.
Woori Bank sold 357.7 billion won worth of Lime fund products, the largest amount among banks and securities companies that sold the products to consumers. The bank’s officials are suspected of having sold the fund products, although they were aware that the products had their problems.
The FSS informed Sohn about its intention to impose the heavy penalty on him on Feb. 3 ahead of finalizing its punitive action.
Woori Bank has thus far denied the allegations that its officials sold Lime fund products despite their knowledge that they were not backed by sound assets. Yet the FSS's decision to slap a heavy punishment on the bank’s then president has made its claim untenable.
The FSS is reportedly considering immediately filing a complaint with the prosecution if its disciplinary action against Sohn is finalized. If Sohn is brought to justice over this matter, Woori Bank may face great difficulties.
Meanwhile, Shinhan Bank president Jin Ok-dong also received a severe warning regarding the bank’s sales of Lime fund products, while Cho Yong-byung, chairman of Shinhan Financial Group, received a lighter cautionary warning.
The disciplinary actions against them will be finalized by the Financial Services Commission after a review by the FSS’s Punishment Review Committee on Feb. 25.