이 기사는 2021년 11월 24일 08:25 thebell 에 표출된 기사입니다.

Eugene Private Equity (Eugene PE), which is Woori Bank’s long-time client, will join the board of directors at Woori Financial Group as it acquired a 4% stake in the financial group and the right to recommend an outside director.

It remains to be seen how Eugene Group will have an impact on Woori Financial’s governance structure, but analysts widely see it as a friendly force for Woori Financial chairman Son Tae-seung.

The Financial Services Commission (FSC) announced on Monday that it had selected five firms to purchase shares in Woori Financial owned by the Korea Deposit Insurance Corporation (KDIC). Eugene PE won the largest chunk of 4% and the right to recommend an outside director and KTB Asset Management earned 2.3%. The Align Partners Consortium, cryptocurrency operator Dunamu and the Woori Financial’s employee stock ownership plan each acquired 1%.

Eugene PE is set to become the fourth largest shareholder of Woori Financial behind the Woori Financial’s employee stock ownership plan with 9.8%, the National Pension Service with 9.42%, and IMM PE with 5.57%.

Eugene PE, the private equity arm of Eugene Group, is wholly owned by Eugene Corp. Industry sources widely said Eugene PE’s acquisition of a stake in Woori Financial is not just for investment purposes. Eugene Group has established a strong relationship with Woori Bank for a long time. The lender, the flagship subsidiary of Woori Financial, has provided liquidity to Eugene Group in various forms in the past years.

Eugene Group borrowed 300 billion won ($252 million) from Woori Bank to acquire Himart in 2007, but suffered from management disputes after the acquisition. When the loan matured in 2009, Eugene Group tried to secure cash by selling its assets, but ended up securing only 30% of its target amount due to a decline in asset valuations.

Fortunately, Woori Bank extended the maturity of 220 billion won out of a total of 300 billion won, and thanks to the lender, Eugene Group could overcome the crisis. Woori Bank and Eugene Group have since maintained a solid relationship involving transactions worth hundreds of billions of won.

With Eugene Group becoming the shareholder, the governance structure of Woori Financial will have six oligopolistic stockholders, including IMM PE with 5.57%, Fubon Life Insurance with 3.97%, Kiwoom Securities with 3.73%, Korea Investment & Securities with 3.77%, and Hanwha Life Insurance with 3.16%.

Eugene PE will have the right to recommend one outside director as it has earned a 4% stake in Woori Financial. Woori Financial's board of directors consisted of a total of seven members, including four outside directors, one non-executive director, and two inside directors, as of the end of September, after two outside directors nominated by Fubon Life and Tongyang Life Insurance stepped down from the board.

Some market insiders are concerned that cracks may appear in the current governance structure if Eugene Group is not in favor of chairman Son Tae-seung.

The board of Woori Financial has been fairly supportive of Son. Despite the fact that the Financial Supervisory Service took severe disciplinary action on Son due to the sales of troubled funds, Woori Financial’s shareholders approved a second term for Son in March 2020. Son filed an administrative suit against the punishment, as well as an injunction seeking to suspend its effectuation date and the court approved the injunction.

Son’s term will end in March 2023. He could be reelected for a third term more easily if Eugene Group supports him.

“I understand that Eugene PE has no disagreement with the existing outside directors on maintaining the current system,” said a source familiar with the situation. “The company's board and governance structure are expected to become even stronger.” (Reporting by Seul-bong Go)