Woori stake sale faces another hurdle

Stake sale in danger of collapse anew as FSC vice chairman said the regulator to forgo plan to ease ownership rules.

The South Korean government's efforts to privatise Woori Finance Holdings hit a snag on Monday when a regulatory official told lawmakers that it would give up a plan to ease ownership rules to boost interest in Woori if they opposed it.

The move puts the government's already-beleaguered $6 billion stake sale of Woori, for which the first round of bidding closes on June 29, in danger of collapse again, after it rejected recently a bid interest by state-run KDB Financial Group, the sole investor that publicly showed interest.

The government has come under pressure to reject KDB's interest, with some politicians and experts saying its plan to revise financial regulations to allow KDB's participation would favour the firm at the expense of other potential bidders.

Shin Je-yoon, vice chairman of Financial Services Commission (FSC), told lawmakers on Monday that the regulators will follow parliamentary recommendation on whether to soften ownership rules.

His remark was confirmed by government officials who attended the meeting.

A bipartisan block has been threatening the government's plan to amend the rules that currently require a financial holding company to bid for at least 95 percent of a target holding company to combine their businesses.

View the full story in Reuters.