November 28, 2024

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This photo shows the National Pension Service's branch in Jongno-gu, central Seoul on March 2. (Yonhap)

South Korea’s public pension fund the National Pension Service said Thursday it would vote against the appointment of former Shinhan Bank President Jin Ok-dong as the new chairman of the Shinhan Financial Group, the nation’s second largest financial giant in terms of total assets.

The NPS, the world’s third-largest pension fund, holds a 7.96 percent stake in Shinhan Financial Group as of December.

The decision comes as the NPS’ special committee reviewed the direction of voting rights ahead of the shareholders meetings of 10 companies it holds sizeable stakes.

Regarding the appointment of Jin as the new Shinhan chief, the committee said it would vote against his approval at the shareholders’ meeting slated for Thursday, citing damage to corporate value as well as his negligence of duty.

In April 2021, Jin, then Shinhan Bank CEO, was slapped with disciplinary measures for failing to offer clients accurate information on a now-defunct Lime Asset Management hedge fund worth $1.4 billion.

Shinhan Financial Group appointed Jin as the new chairman nominee after its former Chairman Cho Young-byoung offered his resignation in December. In his resignation, Cho mentioned he would take responsibility for the Lime scandal.

It remains to be seen whether the NPS’ opposition will affect Jin’s appointment as it comes after the Institutional Shareholder Services, the voting advisory firm, has already advised investors to vote for Jin’s approval.

Back in 2020, the NPS also voiced concerns against former Shinhan chief Cho when he sought his second term, but his reappointment was approved at the shareholders meeting at the time.

By Im Eun-byel (silverstar@heraldcorp.com)