Govt. to Mobilize Police against Cho Hung Bank Strike

As soon as Cho Hung Bank went on a general strike, 50 branch banks closed and customers suffered major inconveniences from disrupted banking services.

The government has decided to mobilize the police against the illegal activities, but the Federation of Korean Trade Unions (FKTU) pledged to wage nationwide strikes. With fierce confrontation between the government and unionists, the ongoing strike at Cho Hung is forecast to escalate into labor disputes across all industries.

Lee Nam-soon, president of the union and Huh Heung-jin, union leader at Cho Hung Bank declared a general strike with some 5,800 union members attending at the bank‘s headquarters in Gwanggyo, Seoul, yesterday at 9 a.m.

“The government has broken its promise on its privatization policy that guarantees bank`s redemption activities, has broken its promise to build a national consensus through the Tripartite Committee, and has broken its promise to sell assets gradually after cutting it up,” said union leader, Lee. “I ordered a general strike for an indefinite period of time for union members at the bank.”

The FKTU once considered launching the strikes, planned for June 30, ahead of schedule by four to five days, but finally decided to go on with the original plan at a recent meeting.

Minister of Finance and Economy Kim Jin-pyo, at yesterday`s press conference, reiterated the government`s firm stance against the strikes, saying that “Governmental authority in partnership with the National Police Agency will fight any illegal activities, such as occupying the IT center of Cho Hung Bank, thereby minimizing any unnecessary damage.”

Minister Kim also said, “There will be no problems concerning computer network disruption since every necessary measure, such as replacement have been prepared for.”

“The longer the labor problem at Cho Hung Bank goes on, the harder its impact will be on the bank`s customers and general public,” said Park Kil-sang, Vice Minister of Labor. “Urgent coordination schemes, stipulated in labor laws, can be implemented if necessary.”

The number of Cho Hung clients has reduced and so have deposits. Korean won deposits stood at 36.3894 trillion won as of June 17, down by 1,313.5 billion won or 3.5% on June 11 and 561.8 billion won from a day earlier.

The Public Fund Oversight Committee plans to hold a meeting at 5:30 p.m. on June 19, with Minister Kim on the government side, Jeon Chul-hwan, Former President of the Bank of Korea, representing the private sector. Other participants will approve of the bank‘s sell-off proposal, agreed to by the Korea Deposit Insurance Corporation (KDIC) and Shinhan Financial Group.

According to the proposal, Shinhan Financial Group will buy a 2.9 trillion won stake in the bank, selling shares for 6,200 won. Shinhan will be saved from paying up to 700 trillion won for any contingent liabilities.

The government also agreed to receive payment for 51% of 546 million shares in cash, and the rest of the amount in equity of Shinhan.