November 23, 2024
Economy
Another ‘Chaebol Sniper’ takes over FSS
[THE INVESTOR] In a move that has apparently spooked the conglomerates, Kim Ki-sik took charge as the new governor of Financial Supervisory Service on April 2 after his predecessor stepped down over a recruiting scandal at KEB Hana Financial Group.
This marks the first time for a former politician and civil rights activist to head Korea’s financial watchdog. And like Fair Trade Commission Chairman Kim Sang-jo, his reputation seems to be preceding him. He has already earned the nicknames “Angel of Death” and “Chaebol Sniper,” which also happens to be a nickname for the FTC head.
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FSS Gov. Kim Ki-sik |
Meeting briefly with reporters on his first day in office, Kim said he is being misinterpreted as a tough advocate of regulations.
“I actually took part in a lot of deregulations when I was at the National Assembly,” said Kim. “I played my role as a civil rights activist and opposition lawmaker and now I will do my best as the FSS head.”
But it’s going to be hard to shake off his anti-conglomerate image, as he has been a solid advocate of strict laws to control them. For instance, he continues to oppose relaxing the policy on keeping companies from dominating their financial units for fear of disrupting or influencing the markets.
Given such a past, whether he will attempt to once again revise the Insurance Business Act will be at the center of attention. As an opposition lawmaker, he had proposed a revision of the act, saying it has been favorable to many conglomerates, mainly Samsung Group.
The current act stipulates that conglomerates cannot have stakes in affiliates worth more than 3 percent of their total assets. However, this is calculated based on the price at which the stakes were purchased, rather than the going market rate, which Kim and many other critics believe were designed to give an advantage to conglomerates like Samsung.
Samsung Life holds a 7.6 percent stake in Samsung Electronics. It paid 50,000 won (US$46.7) apiece but the electronics giant’s share price is now worth 2.4 million won. If the law is revised as Kim had tailored, the life insurance company will have to sell as much as 20 trillion won worth shares of Samsung Electronics, according to market watchers.
This could take a toll on Samsung Group’s cross-holding structure. We will have to wait and watch how it unfolds.
By Park Ga-young (gypark@heraldcorp.com)
