ID :
188403
Tue, 06/14/2011 - 09:59
Auther :
Shortlink :
https://oananews.org//node/188403
The shortlink copeid
KDB's participation in bid for Woori undesirable: regulator
(ATTN: REWRITES lead; ADDS more details in paras 9-17)
SEOUL, June 14 (Yonhap) -- South Korea's top financial regulator said Tuesday it is not desirable for KDB Financial Group Inc. to bid for a controlling stake in state-run Woori Finance Holdings Co., raising the chances that the much-awaited sale of the group will likely hit a snag.
South Korea announced a road map for the sale of Woori Finance, the country's No. 2 banking group, on May 17, after it suspended the deal worth around US$6 billion to sell its 56.97 percent stake in the group last December due to a lack of investor interest.
"As there has been not enough public consensus about KDB Financial's purchase of Woori, the financial watchdog has come to the conclusion that it is not desirable for KDB Financial to bid for a stake in Woori Finance," Kim Seok-dong, chairman of the Financial Services Commission (FSC), told lawmakers.
KDB Financial, which the government is also seeking to privatize, has emerged as a potential buyer for Woori Finance as its head, Kang Man-soo, a former finance minister, openly expressed the group's interest.
But speculation has been rising that the government intends to sell Woori Finance to KDB Financial as it seeks to revise related laws to make it easier for financial holding firms to buy a controlled stake in Woori.
The FSC has been pushing to allow local financial services firms to buy only a 50 percent stake in a state-run bank holding firm in order to consolidate control of the target company. Currently, a banking holding company is required to purchase at least 95 percent stake.
In an apparent bid to dispel such speculation, the FSC officially expressed its opposition against KDB Financial's participation in bidding for Woori Finance.
"The government will provide level playing fields for all local and foreign players to bid for the stake in Woori. South Korea plans to push for the Woori sale in a fair and transparent manner," Kim said.
The government will accept letters of intent to bid for a minimum 30 percent share out of 57 percent by June 29 as planned and will pick a preferred bidder by September. Regardless of its veto about KDB Financial's bidding, the government said it will push for a regulatory revision on rules of bank ownership by a financial services company.
KDB Financial President Kang told lawmakers that his group will follow the government's decision.
"In the first place, KDB's move to buy Woori Finance comes following consultation with the government. It was not solely pushed by KDB Financial," Kang said.
South Korea injected 12.8 trillion won ($11.8 billion) of taxpayers' money into Woori Finance in a bid to rescue the company from near bankruptcy in the aftermath of the 1997-98 Asian financial crisis.
The government has been trying to privatize Woori Finance in a bid to recoup its massive public funds, but the global financial turmoil in late 2008 prevented the government from selling it due to unfavorable market conditions.
But the departure of KDB Financial Group from a bidding race for Woori Finance is raising concerns that the privatization of Woori Finance may be delayed again due to difficulties in finding a suitable buyer.
Top financial services company KB Financial Group said it does not have an interest in bidding for Woori Finance. No. 3 player Shinhan Financial Group is not considering buying a bank and smallest player Hana Financial Group Inc. is currently focusing on extending its deal to buy Korea Exchange Bank from Lone Star Funds.
KDB Financial's potential takeover of Woori Finance could make the combined entity become the country's biggest financial group by far with assets of more than 500 trillion won.
The sale of Woori Finance is one of the top priorities pushed by the government of President Lee Myung-bak as part of its broader plans to privatize financial institutions, including state-run Korea Development Bank, to raise competitiveness in the financial sector.
sooyeon@yna.co.kr
SEOUL, June 14 (Yonhap) -- South Korea's top financial regulator said Tuesday it is not desirable for KDB Financial Group Inc. to bid for a controlling stake in state-run Woori Finance Holdings Co., raising the chances that the much-awaited sale of the group will likely hit a snag.
South Korea announced a road map for the sale of Woori Finance, the country's No. 2 banking group, on May 17, after it suspended the deal worth around US$6 billion to sell its 56.97 percent stake in the group last December due to a lack of investor interest.
"As there has been not enough public consensus about KDB Financial's purchase of Woori, the financial watchdog has come to the conclusion that it is not desirable for KDB Financial to bid for a stake in Woori Finance," Kim Seok-dong, chairman of the Financial Services Commission (FSC), told lawmakers.
KDB Financial, which the government is also seeking to privatize, has emerged as a potential buyer for Woori Finance as its head, Kang Man-soo, a former finance minister, openly expressed the group's interest.
But speculation has been rising that the government intends to sell Woori Finance to KDB Financial as it seeks to revise related laws to make it easier for financial holding firms to buy a controlled stake in Woori.
The FSC has been pushing to allow local financial services firms to buy only a 50 percent stake in a state-run bank holding firm in order to consolidate control of the target company. Currently, a banking holding company is required to purchase at least 95 percent stake.
In an apparent bid to dispel such speculation, the FSC officially expressed its opposition against KDB Financial's participation in bidding for Woori Finance.
"The government will provide level playing fields for all local and foreign players to bid for the stake in Woori. South Korea plans to push for the Woori sale in a fair and transparent manner," Kim said.
The government will accept letters of intent to bid for a minimum 30 percent share out of 57 percent by June 29 as planned and will pick a preferred bidder by September. Regardless of its veto about KDB Financial's bidding, the government said it will push for a regulatory revision on rules of bank ownership by a financial services company.
KDB Financial President Kang told lawmakers that his group will follow the government's decision.
"In the first place, KDB's move to buy Woori Finance comes following consultation with the government. It was not solely pushed by KDB Financial," Kang said.
South Korea injected 12.8 trillion won ($11.8 billion) of taxpayers' money into Woori Finance in a bid to rescue the company from near bankruptcy in the aftermath of the 1997-98 Asian financial crisis.
The government has been trying to privatize Woori Finance in a bid to recoup its massive public funds, but the global financial turmoil in late 2008 prevented the government from selling it due to unfavorable market conditions.
But the departure of KDB Financial Group from a bidding race for Woori Finance is raising concerns that the privatization of Woori Finance may be delayed again due to difficulties in finding a suitable buyer.
Top financial services company KB Financial Group said it does not have an interest in bidding for Woori Finance. No. 3 player Shinhan Financial Group is not considering buying a bank and smallest player Hana Financial Group Inc. is currently focusing on extending its deal to buy Korea Exchange Bank from Lone Star Funds.
KDB Financial's potential takeover of Woori Finance could make the combined entity become the country's biggest financial group by far with assets of more than 500 trillion won.
The sale of Woori Finance is one of the top priorities pushed by the government of President Lee Myung-bak as part of its broader plans to privatize financial institutions, including state-run Korea Development Bank, to raise competitiveness in the financial sector.
sooyeon@yna.co.kr
