RETAIL BANKING | Tony Chua, Korea

Woori privatisation collapses behind parliamentary opposition

FSC withdraws proposal to legally ease bank ownership regulations, signaling death of Woori’s stake sale.

The government’s efforts to privatize Woori Finance Holdings have collapsed as the country’s top financial regulator, the Financial Services Commission, abandoned its attempt to ease bank ownership rules to facilitate Woori’s sale due to parliamentary opposition. 

With the FSC out of options, analysts rang a death knell for Woori’s privatization during the administration of President Lee Myung-bak, even though it was one of his presidential campaign promises.

For a decade, the Korean government has repeatedly tried and failed to sell Woori to recover public funds sunk into the financial group during the Asian financial crisis of the late 1990s. 

Shin Je-yoon, vice chairman of the FSC, confirmed on Tuesday earlier remarks made in a private National Assembly meeting that the FSC will “respect parliamentary members’ wishes” and withdraw its proposal to legally ease bank ownership regulations. 

During the meeting on Monday, Shin reportedly met staunch opposition from both ruling and opposition party representatives on revising regulations that deter one financial holding company from owning another.

Under current rules, a financial holding company must acquire more than 95 percent of another financial holding company’s shares to lawfully become its owner. 

View the full story in JoongAng Daily.

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