Chairman Lee Dong-geol of Korea Development Bank.(KDB)(Photo: KDB)

“People can beat Heaven if they set their minds and work for it,” and “I have such confidence in you to work faithfully for your assigned work,” Chairman Lee Dong-geol of Korea Development Bank (KDB) during his inaugural speech at a ceremony on Sept. 11, 2017.

The chairman has been so apolitical that he hasn’t been afraid of political repercussions by pushing for the restructuring of a number of large companies under KDB’s management. They include Kumho Tire, STX Shipbuilding, Hyundai Merchant Marine, Daewoo Shipbuilding, Daewoo E&C and KDB Life. Most financial sources agree that Chairman Lee already stands at the most completing stage of the initiative, although he is barely at the half point of his first term of office.

Lee, a graduate of Seoul National University, earned his Ph.D from Yale University. He then got a job working at the Presidential Mansion, or Chong Wa Dae as an executive officer, on the recommendation of Chief Economics Executive Officer Kim Tae-dong in 1998. That made him a government official for the first time in his career.

With KDB getting criticized for being slow to take care of companies in financial default under its management, the new chairman pushed for a complete overhaul of those firms. He completed structural reforms of a number of companies, including Kumho Tire and STX Shipbuilding, and stopped GM’s move to pull out of Korea by closing down their local auto plants.

On March 8, KDB signed a contract with Hyundai Heavy Industrial Co. to sell Daewoo Shipbuilding, the first move for an affiliate of Daewoo Group since it was put under the KDB management 20 years ago. Chairman Lee has done something that his predecessors were not able to take care for many years, in just one year and six months on the job.

In a ceremony held on Feb. 12 at the bank’s head office in Yeouido, Seoul, Lee Dong-geol, a former vice chairman and CEO of Shinhan Investment, was inaugurated as chairman to head the state-run Korea Development Bank (KDB) and the KDB Financial Group for the next three years.

The new top manager of the state-run KDB said he is ready to sell off its 90 non-financial affiliates through a nine-person committee set up for the purpose. KDB Capital was not sold in the first attempt and will be put up for sale again. He will aim to sell all 90 non-financial affiliates in the next three years. Lee made the commitment at a media conference following his official inauguration as chairman of KDB and KDB Financial Group on Feb. 18 at the head office of KDB in Yeungdeungpo, Seoul.

Lee said Hyundai Merchant Marine needs to restructure its debts, which increased around 1 trillion won every year in the past several years due to ship owners’ excessive ambitions to make money. The shipping firm needs a massive financial restructuring for its survival, Lee said.

The new top official promised that no firms under the management of KDB would go belly-up on his watch, which he intended to refer to the default of Daewoo Shipbuilding and Marine Co., whose financial condition hit rock bottom due to the loss from its marine plant sector amounting to around 5 trillion won in 2015. KDB will not be forced to join a business firm under its care to conduct restructuring without good reasons, he said.

He went on to say that the absence of “principle guidelines” for restructuring has been key to the problem, adding that any firms without their own measures for financial recovery should not get KDB’s help, even if that means bankruptcy. KDB will not hand out loans indiscriminately to firms not trying to help themselves get out of the dire situations they find themselves in.

“Having served at a bank and securities company, as well as the association of securities dealers and university, Lee has vast experience and knowledge in the financial industry,” the FSC said in a media release. “Based on his experience in banking and investment banking, he would be the right person to lead corporate restructuring by KDB and add vitality to the economy. That's why we recommended Lee as a KDB chairman.”

Lee Dong-geol, 67, replaces Hong Ky-tack, who was recently appointed a vice president of the China-led Asian Infrastructure Investment Bank.

Born in Andong, North Gyeongsang Province, 300 kilometers south of Seoul, Lee began working in the banking industry in 1970 and stayed in the industry until he retired as a vice chairman of Shinhan Investment Corp. In an inauguration ceremony, Lee vowed to step up efforts to help speed up corporate restructuring.

“The KDB is a policy bank, and as a policy bank it is our task to preemptively prevent companies from becoming weak,” he said in his inaugural speech. “We must do our utmost to provide a smooth flow of funds for the country's economic development while also working to help strengthen our firms competitiveness and improve the overall industrial structure through preemptive restructuring.” He also noted that KDB wouldn’t have trouble investing 50 billion won in the Export and Import Bank of Korea to increase its capital.