South Korea’s first internet-only bank K-Bank whose business more or less has been idled due to lack of fund reattempts capitalization through issue of rights worth 594.9 billion won ($487.7 million) on June 18.

According to K-Bank on Tuesday, its plan to issue 118.98 million new shares worth 594.9 billion won gained a nod from its board a day earlier. Once completed, the additional equity will bump up the lender’s total paid-in capital to 1.1 trillion won.

New issues will be allocated to the shareholders according to their interests – KT (10 percent), Woori Bank (13.79 percent), and NH Investment & Securities (10 percent). Forfeited shares will be acquired later by KT and its subsidiaries.

Still, uncertainty remains as a revised bill to allow a non-financial tech firm to own a majority stake of up to 34 percent in a bank even with criminal records of breaking anti-trust law has failed to pass in the parliamentary plenary session last month.

The current law gives eligibility to become a lender’s majority shareholder only to firms without a history of violating tax, fair trade and other financial related regulations. The revision was supposed to remove the clause regarding the anti-trust law violation as KT has been under prosecutorial probe for violating the antitrust regulation on price collusion.

K-Bank has dated the new issue offering in June with hopes that the bill will pass in May.

If the bill is once again struck down in the May session, KT and K-Bank plan to seat a substitute for the telecom company – KT’s subsidiaries including BC Card. They have already convinced shareholders to the backup plan.

K-Bank’s new CEO Lee Moon-hwan, who took office last month, is the former head of BC Card.

“Lee In-young, floor leader of ruling Democratic Party vowed to pass the revised bill in the next parliamentary session after the April 15 general elections. The board decision is a preemptive measure for that to speed up normalization of the banking operation,” said a source from the K-Bank shareholders.

“If the lawmakers vote against the revision again, KT is able to inject much-needed capital into K-Bank through its subsidiaries as it is devising plans with the financial authority,” said another source.

KT shares on Wednesday rose 1.41 percent to close at 21,600 won in Seoul.

By Chung Joo-won and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]