Is the worst over for DGB?
[THE INVESTOR] It’s still early to predict, but the worst may be over for DGB Financial Group now that its stubborn chairman has finally stepped down.
Park In-gyu, who had defied a prosecutorial investigation for a year, resigned on March 29. This was less than a week after he stepped down as head of Daegu Bank, one of the group’s key subsidiaries.
From April to August 2014, Park shopped for 3.27 billion won (US$ 307 million) worth of gift vouchers with a corporate credit card. He later sold them at discounted prices to secure around 30 billion won. This money was allegedly used as slush funds to cover unauthorized expenses.
Ex-DGB Chairman Park In-gyu smiles for the camera at better times.
A total of 16 executives had been taken into custody along with Park to be questioned.
The investigation, however, appeared to be dragging along for about six months. Park also vehemently refused to step down. At the end of 2017, he even bulldozed ahead with some C-level reshuffling. Recently, he said he would stay on as chairman to “handle the current situation.”
At the same time, the prosecutorial team investigating the case underwent a complete change in lineup, triggering suspicions that things were losing steam.
However, fresh fuel was added when evidence surfaced indicating the DGB top management may have rigged the hiring at some of its subsidiaries.
On April 2, DGB and Daegu Bank will hold an extraordinary board meeting to discuss appointing the next chairman and bank president.
In addition to cleaning up the corporate image, another mission that the new chief would have is to put the stamp on the acquisition of Hi Investment & Securities -- a Hyundai Heavy Industries unit. The deal was supposed to be approved in February, but the recent turn of events had kept things on hold.
DGB Financial Group has its roots in the Daegu region where Daegu Bank was born as the country’s first regional bank about half a century ago.
Its subsidiaries are Daegu Bank, DGB Life, DGB Capital, DGB Asset Management, DGB Upay, DGB Credit Information and DGB Data System.
Its foreign investors include Templeton Investment Counsel and Shroder Investment Management.
By Kim Ji-hyun (firstname.lastname@example.org)