Hana Financial Group on Thursday issued a de facto ultimatum to the labor union of Korea Exchange Bank, calling on its leaders to scrap their opposition to the planned merger between Hana Bank and KEB.
The pressure from Hana came amid a reported situation that the group could face a heavier tax burden if the consolidation process is not completed in the third quarter.
“If Hana and Korea Exchange fail to see the completion of their integration by the end of September, (the group) would be disqualified from enjoying a tax deduction worth 275.4 billion won ($245 million),” Hana Financial said in a statement.
It cited the relevant law, which temporarily provides a merged financial entity with a 75 percent reduction in registration license tax.
The union protest seems to have lost momentum even among a large portion of KEB’s ordinary workers, many of whom also belong to the union as members.
More and more KEB workers at branches nationwide are calling for the union, through its internal bulletin board, to be more cooperative with the merger timetable, tentatively agreed upon earlier.
A banker was quoted by KEB management as saying that “further conflict and splits will cause a vicious circle including weakening of the business performance (of bankers).”
Another worker reportedly said that “now the ordinary workers reject the union’s backlash without a substitute and hope to extinguish the conflicts as soon as possible.”
The KEB union has continued to call for Hana Financial chairman Kim Jung-tai to revise the member structure for the merger negotiation.
Union leaders have accused the group of slandering the union.
Hana Financial Group acquired KEB from U.S.-based Lone Star Funds in 2012.
