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Shinhan shareholders vying to take control of group

Shinhan Financial Group Chairman Cho Yong-byoung speaks during a shareholders' meeting at the group's headquarters in Seoul in March. / Courtesy of Shinhan Financial Group
Shinhan Financial Group Chairman Cho Yong-byoung speaks during a shareholders' meeting at the group's headquarters in Seoul in March. / Courtesy of Shinhan Financial Group

IMM, BNP Paribas, Korean Japanese in hurry to increase stakes

By Park Jae-hyuk

Shinhan Financial Group's major shareholders are in a fierce competition to maintain their influence over the nation's leading banking group, industry officials said Friday.

Their moves come after Affinity Equity Partners and Baring Private Equity Asia acquired stakes of 4 percent and 3.6 percent, respectively, after the group issued new shares in early September.

The key shareholders increased their stakes recently in an apparent bid to defend their positions against the foreign private equity firms (PEFs), each of which is supposed to get a Shinhan board seat next year.

IMM Private Equity is the latest to join the trend of acquiring additional shares.

According to Shinhan, the domestic buyout firm recently agreed to purchase shares worth 100 billion won ($87 million) through an over-the-counter block deal.

"Orange Life Insurance is obligated to sell its stake in Shinhan, so IMM will acquire some of those shares," a Shinhan official said.

IMM won a Shinhan board seat after it acquired Shinhan stock in February last year when the group issued new shares worth 750 billion won.

The PEF's previous stake in Shinhan was estimated at 3.7 percent, so the recent agreement is expected to allow the firm to hold a 4 percent stake in the banking group.

In late September, BNP Paribas (BNPP) bought 20 billion won in Shinhan shares to maintain its 3.5 percent stake ― the minimum amount it needs to keep its strategic partnership with the Korean financial group.

The French banking group is now more likely to continue exercising its right to nominate a successor to BNP Paribas Securities Japan CEO Philippe Avril, who will end his term as a Shinhan nonexecutive director next year.

A group of ethnic Koreans living in Japan ― regarded as the largest shareholders of Shinhan ― are also presumed to have collectively bought an additional 1 percent stake over the past month to consolidate their status.

They have exercised a strong influence over Shinhan after investing 25 billion won in it when the bank was established in 1982 by Lee Hee-gun, an ethnic Korean citizen of Japan.

Shinhan's recent decision to attract investment from the two Hong Kong-based PEFs, however, is seen as a move to weaken the influence of the ethnic Koreans in Japan.

According to sources, the Korean Japanese shareholders are attempting to increase their total stake from 17 percent to 20 percent.

Some reportedly met Taisei Group Chairman Park An-soon earlier this month ― one of four Korean Japanese nonexecutive directors, along with CYS CEO Choi Kyong-rok, Fedora CEO Jin Hyun-duk and Primer Korea CEO Yuki Hirakawa ― to urge cooperation among Korean Japanese shareholders.


Shinhan Financial Group Chairman Cho Yong-byoung speaks during a shareholders' meeting at the group's headquarters in Seoul in March. / Courtesy of Shinhan Financial Group
Shinhan Financial Group Chairman Cho Yong-byoung speaks during a shareholders' meeting at the group's headquarters in Seoul in March. / Courtesy of Shinhan Financial Group

IMM, BNP Paribas, Korean Japanese in hurry to increase stakes

By Park Jae-hyuk

Shinhan Financial Group's major shareholders are in a fierce competition to maintain their influence over the nation's leading banking group, industry officials said Friday.

Their moves come after Affinity Equity Partners and Baring Private Equity Asia acquired stakes of 4 percent and 3.6 percent, respectively, after the group issued new shares in early September.

The key shareholders increased their stakes recently in an apparent bid to defend their positions against the foreign private equity firms (PEFs), each of which is supposed to get a Shinhan board seat next year.

IMM Private Equity is the latest to join the trend of acquiring additional shares.

According to Shinhan, the domestic buyout firm recently agreed to purchase shares worth 100 billion won ($87 million) through an over-the-counter block deal.

"Orange Life Insurance is obligated to sell its stake in Shinhan, so IMM will acquire some of those shares," a Shinhan official said.

IMM won a Shinhan board seat after it acquired Shinhan stock in February last year when the group issued new shares worth 750 billion won.

The PEF's previous stake in Shinhan was estimated at 3.7 percent, so the recent agreement is expected to allow the firm to hold a 4 percent stake in the banking group.

In late September, BNP Paribas (BNPP) bought 20 billion won in Shinhan shares to maintain its 3.5 percent stake ― the minimum amount it needs to keep its strategic partnership with the Korean financial group.

The French banking group is now more likely to continue exercising its right to nominate a successor to BNP Paribas Securities Japan CEO Philippe Avril, who will end his term as a Shinhan nonexecutive director next year.

A group of ethnic Koreans living in Japan ― regarded as the largest shareholders of Shinhan ― are also presumed to have collectively bought an additional 1 percent stake over the past month to consolidate their status.

They have exercised a strong influence over Shinhan after investing 25 billion won in it when the bank was established in 1982 by Lee Hee-gun, an ethnic Korean citizen of Japan.

Shinhan's recent decision to attract investment from the two Hong Kong-based PEFs, however, is seen as a move to weaken the influence of the ethnic Koreans in Japan.

According to sources, the Korean Japanese shareholders are attempting to increase their total stake from 17 percent to 20 percent.

Some reportedly met Taisei Group Chairman Park An-soon earlier this month ― one of four Korean Japanese nonexecutive directors, along with CYS CEO Choi Kyong-rok, Fedora CEO Jin Hyun-duk and Primer Korea CEO Yuki Hirakawa ― to urge cooperation among Korean Japanese shareholders.


Park Jae-hyuk pjh@koreatimes.co.kr


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