South Korea’s top financial regulator suspended a review of an application by KT to raise its stake in K bank and become the online bank’s largest shareholder, Yonhap News Agency reported.
The Financial Services Commission halted the review of KT’s plan because the country’s Fair Trade Commission is conducting a follow-up probe of the operator, related to a price-fixing case dating back to 2016.
At the time, KT was fined KRW700 billion ($616 million) for violating the Fair Trade Act.
Yonhap News Agency explained a recently implemented law enables technology companies to hold a maximum stake of 34 per cent in online-only banks. However, Korea JoongAng Daily noted the same law prohibits a company found guilty of breaching the fair trade regulations from becoming an internet bank’s largest shareholder for five years after the violation.
KT wants to expand its stake in order to raise new capital for the struggling bank since other shareholders are reluctant to offer additional financing, the newspaper wrote.
The aim was to raise KRW592 billion for K bank from a rights offering.
K bank posted a net loss of KRW80 billion in 2018, down from a KRW84 billion loss in 2017.
It is one of two internet-only banks in South Korea, with Alibaba’s Alipay, Woori Bank and Hyundai Securities among its 21 partners.
Rival Kakao Bank is backed by Kakao Group along with 11 partners, including Tencent, eBay, Korea Investment & Securities, Kookmin Bank and Loen Entertainment.Subscribe to our daily newsletter Back