[단독]ISS opposes the appointment of Shinhan-Woori Finance directors… “Concerns about reappointment of Jin Ok-dong”

[이데일리 김인경 기자] ISS, the world’s largest voting rights advisory firm, recommended “a lot of opposition” on the agenda for reappointment of internal and external directors at the shareholders’ meeting of Shinhan Financial Group and Woori Financial Group, which will be held this week. The reason is that they have raised the risk of corporate governance by failing to properly check the current top management. The burden of Shinhan Financial Group and Woori Financial Group has also increased, as opposed to ISS, which has a strong influence in the exercise of voting rights by foreign shareholders.

ISS “Appointment of Director Jin Ok-dong, Director of Shinhan Holdings should be opposed”

According to the report of ISS’s’Agenda Analysis of Shareholders’ Meeting for 2021 Korea’s 4 major financial holdings in 2021′ obtained by E-Daily on the 23rd, ISS made a dissenting opinion on the reappointment of directors of Shinhan Finance and Woori Finance.

ISS expressed its opposition to the reappointment of six outside directors, including Chairman Jin Ok-dong, Shinhan Bank President who was re-recommended as other non-executive directors in the Shinhan Financial Report, and six outside directors such as Park An-soon, Byeon Yang-ho, Seong Jae-ho, Lee Yoon-jae, Choi Gyeong-rok, and Yong-hak Yoo who are about to expire did. It also recommended opposition to the appointment of directors Sung Jae-ho and Lee Yun-jae, candidates for the Audit Committee.

ISS expressed concern over the fact that Mr. Jin was notified of a censure warning from the Financial Supervisory Service regarding the sale of the Lime Fund. ISS said, “The sanctions review has not yet been completed,” and “We are expressing serious concerns regarding the prior sanctions of the Financial Supervisory Service.” Lime fund sales sanctions trials, which have been ongoing since last month, were held twice until the 18th, but they have not yet reached a conclusion. After the third sanctions review is held next month, the final decision is made through a resolution of the Securities and Futures Commission and the Financial Services Commission.

ISS also said, “Jin Jin also allowed a reappointment of Chairman Yong-Byeong Cho, who was convicted for being involved in hiring corruption last year,” and pointed out that “Jin’s non-response at the time was a serious failure in governance and risk management.”

Jin Ok-dong, head of Shinhan Bank. (Photo Credit=Shinhan Bank)

ISS explained to the outside directors who favored the reappointment of Chairman Cho Yong-byung last year, saying, “Even though the conviction, Chairman Cho was not dismissed from the board. Last year, Chairman Cho was convicted in the first trial regarding hiring corruption. Since then, ISS recommended that it should oppose Chairman Cho’s reappointment in March last year.

However, ISS is a new candidate for four outside directors recommended by the Shinhan Board of Directors this year: △Soo-geun Kwak, Professor Emeritus of Seoul National University Business School △Hoon Bae, Attorney Orbis, Law Firm, Yong-Kook Lee, Clinical Professor, Seoul National University Law School △Jae-Bung Choi, Professor of Mechanical Engineering, Sungkyunkwan University Recommended favor.

We also oppose the reappointment of Woori Finance directors “Failure to dismiss Son Tae-seung”

The ISS has also put a back on the agenda for the succession of internal and external directors of Woori Finance. First of all, opposition to the appointment of outside directors Jeong Chan-hyung, who are members of the Audit Committee, including the succession of five directors, including Lee Won-deok (inside director), Noh Sung-tae, Park Sang-yong, Jeon Ji-pyeong, and Jang Dong-woo, and the appointment of outside directors Roh Sung-tae and Jang Dong-woo as members of the audit committee. Advised.

ISS said, “There was a significant failure of the company’s governance structure and management supervision,” said ISS. “Not only failed to dismiss Son, but (the board of directors) supported him despite successive sanctions against Chairman Tae-seung Son by the financial authorities.” Pointed out.

“Woori Financial has another problem of lack of supervision over Lime private equity funds since the overseas interest rate-linked derivatives (DLF) crisis.” “At present, sanctions against Chairman Son (Lime) have not been decided, but serious concerns are raised.” He explained. ISS also added, “In consideration of the seriousness of the issues raised by the supervisory authority and the lack of management of the board of directors, it is recommended (opposing the reappointment of directors).”

Chairman Son received a censure warning from the Financial Supervisory Service in relation to the DLF incomplete sale last year, and subsequently filed an administrative lawsuit to suspend the effect. The Seoul Administrative Court has accepted this and cited the request for provisional injunction. Currently, Chairman Son has been notified of severe disciplinary action equivalent to suspension of his job in relation to his responsibility for selling lime funds when he was the head of Woori Bank.

ISS recommended approval for major agendas of Hana Financial Group, such as the reappointment of Hana Financial Group Chairman Kim Jong-tae, which attracted attention. “There are no known problems,” explained ISS.

ISS is the world’s largest voting rights advisory firm, with over 1900 members receiving advice from ISS. In particular, it has a great influence on foreign investors. Currently, Shinhan Financial Group’s foreign shareholders account for 59.7% and Woori Financial Group 25.7%. However, despite the ISS’ opposition last year, Cho Yong-byung, chairman of Shinhan Financial Group and Son Tae-seung, chairman of Woori Financial Group, succeeded in reappointing.

On the other hand, Glass Lewis, which divides the ISS and the global voting rights advisory market, recommended approval of all major agendas, such as the appointment of directors of Shinhan Finance and Woori Finance.