The board of South Korea’s Shinhan Financial Group on Thursday decided to allow its former president Shin Sang-hoon, who left the country’s largest financial conglomerate amid an internal power feud among senior executives, to exercise his stock option grants as he was acquitted of heavy criminal offenses of embezzlement and breach of trust by the Supreme Court in March.
Of the 237,678 stock options Shinhan Financial issued to Shin between 2005 and 2008, the board decided to let him to exercise 208,540 stock options that were issued between 2005 and 2007. Along with Shin, Lee Baek-soon, former chief executive of Shinhan Bank, and Lee Jung-won, former president of Shinhan Data System, who were also involved in the power scandal, were granted the rights for 52,969 shares issued between 2005 and 2007 out of total 62,435 stock options and all 15,024 shares received between 2005 and 2008, respectively.
Shinhan Financial Group said that it has decided to put off the decision to allow stock option rights to Shin and former Shinhan Bank CEO Lee for shares given in 2008 as they are bound to receive further restrictions from the Financial Supervisory Service considering that they have partially been convicted on charges of embezzlement.
Following the latest decision, the ugly power scandal at the country’s largest financial group has finally ended, freeing the group’s new management from any burden related to the dispute, industry observers noted.
The feud broke out among Ra Eung-chan, former chairman of Shinhan Financial Group, Shinhan Bank CEO Lee and Shin in 2010, followed by criminal charges brought by Shinhan Bank against Shin who was accused of pocketing management consulting fee to be given to late Shinhan Bank honorary Chairman Lee Hee-gun, breach of trust involving illicit granting of loans and violation of financial holding company law. A series of lawsuits against other executives were also filed and with lawsuits in action, the group’s board had put off stock option rights granted to all the executives involved in the lawsuits.
The dispute aimed to oust Shin led to a disgraceful exit for all the founding members, Ra, Lee and Shin, but Shin later demanded an apology from Shinhan for defaming his reputation following the country’s high court’s decision early this year to acquit him of criminal offenses of embezzlement and breach of trust.
The Supreme Court also acquitted former Shinhan Data System President Lee, but upheld the lower court ruling that gave former Shinhan Bank CEO Lee a prison term of 18 months with two-year probation.
By Kim Tae-sung
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