DGB Financial Group, a Daegu-based financial holding firm in South Korea, is resuming the process to take over HI Investment & Securities Co. put on hold after its former chief was embroiled in slush fund and illicit hiring scandals.
According to financial industry sources on Sunday, DGB Financial Group will seek an approval from the Financial Supervisory Service to buy out HI Investment & Securities Co. early next month. The financial group in November last year inked an agreement with Hyundai Heavy Industries Co., parent company of Hyundai Mipo Dockyard Co., which holds the largest stake in HI Investment & Securities, to acquire an 85 percent stake in the securities firm for 450 billion won ($421.7 million).
The group was set to finalize the deal by the end of March this year but the plan was delayed after it faced an unexpected setback during a governmental review process. Its former chairman Park In-kyu came under illicit hiring and slush fund creation probe, which made the group fail in the government’s review of large shareholders’ eligibility criteria. Park stepped down late March and the group has named a new chief, who is to be formally appointed later this month.
With the chairman issue cleared, there should not be any problems for DGB Financial Group to gain the government’s approval on its acquisition plan, said an FSS official.
DGB Financial whose main revenue source is its commercial bank arm Daegu Bank that serves Daegu and surrounding areas in the southern part of the country has been seeking to strengthen its business portfolio. In February, it acquired Cambodia’s Cam Capital Specialized Bank through Daegu Bank.
By Han Woo-ram and Cho Jeehyun
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