Park Jeong-rim, the former CEO of KB Securities who faced severe penalties from financial authorities due to the Lime Fund scandal, has returned to the industry as an outside director at Timefolio Asset Management. Jeong Young-chae, the former CEO of NH Investment & Securities, also made a comeback last year as a senior advisor at Meritz Securities. Following a recent Supreme Court ruling that annulled the severe penalties, the re-entry of these former securities executives into management is gaining momentum.
On June 15, Timefolio Asset Management appointed Park Jeong-rim as a new outside director during its regular executive reshuffle. Previously, Park had briefly returned to the board as an outside director at SK Securities in March 2024 while litigation was ongoing, but he resigned before completing his term. He has since been serving as a management advisor at KB Securities and has now officially resumed external activities with his appointment at Timefolio.
Park's return to the board comes after the Supreme Court's final ruling in April, which confirmed that the Financial Services Commission's penalties against him and Jeong Young-chae were unjust. The court ruled that the penalties, which included suspensions and warnings related to the Lime and Optimus incidents, were overturned. This marked the first legal judgment deeming the severe penalties imposed by financial authorities as inappropriate since the scandal erupted in 2019.
In November 2023, the Financial Services Commission had finalized severe penalties against both CEOs, citing their failure to establish internal control standards during the sale of high-risk private equity funds. As a result, both Park and Jeong stepped down from management roles, but they immediately filed lawsuits against the penalties.
The courts consistently ruled in favor of the CEOs from the first to the third trial. The Supreme Court confirmed the lower court's ruling, stating that while the securities firms had internal control standards in place, it was difficult to hold the executives personally liable for the financial incidents.
Following the Supreme Court's decision, the trend of their return to active roles is becoming clearer. Jeong Young-chae has been serving as a senior advisor in the corporate finance division at Meritz Securities since early last year, while Park has officially resumed his activities as an outside director just two months after the Supreme Court ruling.
Within the financial investment industry, there are calls to avoid excessive stigma against their return and to respect companies' autonomous management decisions. An industry insider stated, "This incident stemmed from organizational financial mishaps rather than individual misconduct by the CEOs. Under the Financial Company Governance Act, individuals who have faced criminal penalties can return after five years, and these individuals were not subject to criminal penalties. They have also been away from management for seven years, effectively paying their dues."
The insider added, "Preventing re-employment in the financial sector indefinitely due to past management responsibilities does not align with the freedom of career choice. From the perspective of individual corporate boards, recruiting the best talent to manage the company effectively is essential, and their practical management experience can positively impact the operational environment of asset management firms."
Meanwhile, Timefolio Asset Management, which appointed Park as an outside director, also named Cha Mun-hyeon, who has served as COO since the company's inception, as the new CEO. As a result, Timefolio will transition to a dual CEO structure with the existing CEO Hwang Seong-hwan and the newly appointed Cha Mun-hyeon. Timefolio stated, "This appointment aims to enhance management expertise and strengthen governance."
* This article has been translated by AI.
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