Woori union denies plans to participate in management

Woori union denies plans to participate in management

Woori Financial Group Chairman Son Tae-seung attends a meeting with Financial Supervisory Service Governor Jeong Eun-bo at the headquarters of the Korea Federation of Banks in Seoul, Nov. 3. Joint Press Corps-Yonhap

By Lee Min-hyung

Woori Financial Group’s employee stock ownership association will not seek to take part in management, but focus instead on boosting the firm’s stock valuation after becoming its largest shareholder, industry officials said Thursday.

The association succeeded recently in acquiring more than a 1 percent stake in Woori from the state-run Korea Deposit Insurance Corporation. As a result, the association will be able to play a bigger role within the group as its largest shareholder, with a 9.8 percent stake in Woori after the sale is completed.

Woori’s privatization has been one of the biggest issues the lender has faced this year and all eyes have been on whether its union will step up pressure on top management to introduce an outside director recommended by the union.

The appointment of union-backed outside directors has been one of the key issues in the domestic financial industry this year, with financial firms ― mostly those run by the state ― holding talks between management and labor on whether to introduce such a system for more transparent corporate management.

But industry officials argued that this is not the case for Woori, as its union and management are on relatively good terms with each other, sharing the goal of enhancing stock value following privatization.

“Labor and management from major state-run financial firms are in conflict over the introduction of the system, but Woori’s union and the association do not want to cause any stir on such issues and are placing top priority on strengthening its stock value,” a financial industry source said.

Woori Financial’s stock bottomed out soon after the outbreak of the pandemic, falling to around 7,000 won ($5.95) per share in early 2020. But the stock price has since been on a recovery path. Woori shares closed at 12,500 won on Thursday.

But it will take much more time for the firm’s stock to reach its previous high. The Woori association wants to keep up the momentum at this critical juncture when it has to regain the trust of investors after privatization.

“Unlike other financial firms, the association has been supportive of Woori Financial Group Chairman Son Tae-seung,” the source said. “Woori has to deal with a series of crucial tasks ― such as the acquisition of a securities firm or insurer ― to expand its business portfolio into the non-banking sector, and any internal discord will put the brakes on the plans.”

Last year, Woori’s union defended Son when the Financial Supervisory Service reprimanded him for Woori Bank’s involvement in a nationwide fund mis-selling scandal. At that time, the union criticized the watchdog for “seeking to shift its responsibility to financial firms” by using its authority.

Considering the fact that few unions at other financial firms took such steps, chances are slim that the Woori association and union will shift their position abruptly and intensify pressure on management.

“Woori’s management and the association maintain a good relationship with the same goal of boosting stock valuation,” an official from the banking group said.

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