Resignation from KB Financial chief nomination `not due to gov`t pressure`

(ATTN: UPDATES with more details in paras 9-12)
SEOUL, Jan. 11 (Yonhap) -- The head of Kookmin Bank denied Monday speculation
that his resignation from nomination for the chairman of the bank's parent group
resulted from government pressure.
Kang Chung-won offered to step down on Dec. 31 from chairmanship of KB Financial
Group Inc. amid intense scrutiny by the financial regulator into alleged
wrongdoing by the group's external directors.
He was nominated Dec. 3 to lead South Korea's top financial services company,
unanimously approved by the group's outside directors.
"My resignation from the candidacy is not related to pressure from the
government," Kang told reporters.
Kang said as he stepped down from the nomination, he will not run for a process
to pick the group's chairman, adding that he will do his best to manage Kookmin
Bank until October when his tenure ends.
His resignation sparked criticism that the government is trying to exert
influence on an internal decision of a private company that seems to be at odds
with government policy makers.
The financial regulator, which has prepared to overhaul the outside director
system of the nation's banks, asked KB Financial to postpone the selection of its
new chairman, but the group pushed through with the nomination.
The Financial Supervisory Service (FSS) conducted a probe into alleged wrongdoing
by the group's outside directors, who have wielded decisive influence on the
process of picking the group's chairman. The board consists of nine outside
directors and two inside members.
"The authorities seemed to ask the head of the committee (which selects the
group's chairman) to postpone the process of picking the chairman, but as the
move was not regarded as government pressure, the committee moved to push through
the process," Kang emphasized.
Market watchers said Kang's resignation may delay KB Financial Group's push for
takeovers aimed at boosting its competitive edges.
"There is no reason not to purchase financial firms including Korea Exchange Bank
(KEB) if a lender is up for sale," Kang said, dismissing such speculation.
The group has shown an interest in buying the KEB, controlled by U.S. buyout fund
Lone Star Funds.
Kang was nominated to lead the group two months after Hwang Young-key stepped
down when the financial watchdog punished him for inflicting investment losses
worth of 1.62 trillion won (US$1.39 billion) on Woori Bank. Hwang headed the
state-owned bank and its parent in 2005 and 2007.
The process of selecting a new head had been marred by a controversy over fairness.
Two other candidates -- Lee Chol-hwi, chief executive of the state-run debt
clearer Korea Asset Management Corp., and Kim Byung-ki, former head of the
Samsung Economic Research Institute -- withdrew their bids, saying that outside
directors had already decided to pick Kang.
sooyeon@yna.co.kr
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