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SEOUL, March 8 (Yonhap) -- The board of Korea Exchange Bank (KEB)'s reversed decision to pay out dividends to its biggest shareholder is sparking rows as it handled the issue in a murky and clumsy manner, the bank's union said Friday.
The board of KEB decided Tuesday to pay out dividends worth of 12.9 billion won (US$11.9 million) to shareholders, excluding its largest stakeholder Hana Financial Group Inc. But it withdrew its move the very next day, deciding to dole out dividends valued at 32.2 billion won to Hana Financial and other shareholders.
Hana Financial currently holds 60 percent stake in KEB, seeking to raise its interest to 100 percent through share swap in April. But it is unclear whether Hana's shareholders would approve the share swap or how much the group would receive calls from opponents to buy back shares enough to null the share-swapping attempt.
"The reversal was made with an aim of treating KEB's biggest shareholder and minority stakeholders equally," a spokesman at KEB said.
The capricious behavior of KEB's board is drawing criticism, as it handled the agenda in a clumsy way, in which shareholders tend to have a grave interest, KEB's labor union said.
KEB's labor union urged the bank's board members to resign, calling them to clarify whey the board reversed its earlier decision.
Hana Financial Group completed a deal to take over KEB from U.S. buyout fund Lone Star Funds in early 2012.
On Jan. 28, South Korea's No. 3 banking group said it plans to swap its share with 5.28 KEB shares on April 5.
The group also added that it would buy shares from Hana Financial and KEB stakeholders who oppose the group's move at pre-determined prices, but if the value of such shares exceeds 1 trillion won from either shareholders, the group will nullify its share-swapping move.
Unionized workers at KEB opposed the group's share swap plan, saying that the move was in clear violation of the agreement, which stipulates that Hana Financial may begin talks with the KEB union on a possible merger process five years after the takeover.
Last year, Hana Financial and the KEB union made the post-takeover agreement, under which Hana Financial will run KEB as an independent entity and maintain its current brand and wage system until at least 2017.
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