Kookmin CEO's censure may affect KEB acquisition bid

FSS investigation on Kang caused KB board to sidetrack from deciding on KEB takeover.

Kang Chung-won, the Kookmin Bank chief executive, could face sanctions when the Financial Supervisory Service meets next month to deliberate on allegations involving Korea's largest bank by assets.

The investigation of Kang is seen as affecting a possible bid by the parent KB Financial Group for Korea Exchange Bank, expected to be sold by Lone Star, the U.S. private equity firm, later this year, according to industry sources.

The FSS probe has distracted KB from making a decision on whether to make a bid for KEB, said an executive at a local securities firm who did not want to be identified.

Kang is seen as a strong supporter of the KEB deal, but many analysts believe he is likely to step down as Kookmin chief executive when his term expires in October whatever the FSS decides.

An FSS deliberation committee is scheduled to hold two meetings on 6 May and 20 May to consider sanctions on KB Financial Group and Kookmin Bank, said an FSS official.

The FSS committee is expected to hear the results of an investigation conducted on the KB group.

View the full story in JoongAng Daily.

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