February 28, 2020

Shinhan chief gets suspended sentence over influence-peddling charges

PUBLISHED : January 22, 2020 - 16:58

UPDATED : January 22, 2020 - 16:58

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Shinhan Financial Group Chairman Cho Yong-byoung on Jan. 22 received a suspended sentence on influence-peddling charges in the flagship banking unit’s recruiting scandal, even as his leadership remains unscathed. 

The Seoul Eastern District Court handed the 63-year-old executive a six-month prison term, suspended for two years. Expressing disappointment, Cho said he would appeal to a higher court.

The lower court found Cho partially guilty on the charges, including influence-peddling in recruitment of more than 100 applicants -- some of whom had personal ties to Shinhan’s executives -- from 2013 to 2016. 

Shinhan Financial Group Chairman Cho Yong-byoung leaves the Seoul Eastern District Court in Seoul on Wednesday. (Yonhap)

Cho was the head of Shinhan Bank from March 2015 to early 2017, and then went on to take the post of the financial group’s chairman. He was reappointed in December to continue serving in the post until March 2023, amid questions being raised over the case damaging the group’s reputation.

The prosecution earlier demanded a three-year jail term and a 5 million won ($4,314) fine on charges related to influence-peddling and gender discrimination in hiring.

“While Cho did not make specific orders to the bank’s human resources team, the fact that he notified them of the applications as the chief is enough to damage the adequacy and integrity of the recruitment process,” the judge said.

“But we have considered Cho’s moves were not directly linked to influencing the hiring process,” the judge added.

Cho, however, was acquitted of charges of gender discrimination in the hiring process, with the court citing the lack of specific standards proving he favored males over females.

With the court decision not to take Cho into custody, he is likely to continue serving as Shinhan’s chairman with the board’s support.

The group’s board of directors had expressed willingness to retain Cho, if he is able to avoid prison time, in a statement released after his reelection in December. They said they have considered the risks and will launch contingency plans if Cho is taken into custody.

He was appointed unanimously by the chairman selection committee -- consisted of seven of 11 board members -- to serve his second term.

The related laws and Shinhan’s internal regulations state that executives will be barred from future nomination, if they have previously served a jail term.

In line with the board’s support, Shinhan’s labor union submitted a petition to the court last month, pleading for a favorable handling of the case.

By Jung Min-kyung/The Korea Herald (

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