A squabble between the union of a local bank and a private academy may escalate into a full-scale legal war.

Kim Seung-yu, head of the Hana Academy School’s board of directors, and Yoon Kyo-jung, a board member, said on Tuesday that the school would take legal action against the union at Korea Exchange Bank for slander, and also seek compensation for damages. 

Earlier last month, the KEB union took out an ad in a local newspaper lambasting Hana for accepting 25 billion won ($23 million) in donations from KEB following a board meeting on Oct. 16.

The bank will provide an additional 750 million won to cover “operation expenses.”

The KEB union called the decision “illegal,” seeking the deliberation of the financial authorities on the matter after publishing the ad.

Kim, the former chairman of Hana Financial Group, rejected the union’s claims, saying there was no reason for the school to refuse a donation.

“We have never demanded it, and it was KEB who first approached us,” said Kim at Tuesday’s news conference.

He added that the students are the biggest victims of the advertisement.

Kim said that with the donation, KEB employees’ children will be eligible to apply at Hana based on an exclusive admissions process, which currently is open only to Hana Bank employees.

The financial authorities said they are reviewing the complaint and will discuss the issue with legal experts before reaching a conclusion.

By Kim Ji-hyun (jemmie@heraldcorp.com)