South Korea’s Supreme Court in a case involving allegations of hiring fraud against Hana Financial Group Chairman Ham Young-joo (함영주) overturned part of a key guilty ruling and sent the case back to the high court. It said there was insufficient direct evidence that he conspired to pass specific applicants. That effectively removed Ham’s legal risk. Hana Financial’s push into new businesses such as stablecoins and digital finance is expected to accelerate.

On Jan. 29, the Supreme Court’s First Division quashed and remanded the guilty finding for obstruction of business against Ham, who was the bank’s chief executive at the time, while keeping in place a guilty ruling related to discriminatory hiring against women. It dismissed appeals by a deputy bank head and the bank as a corporate entity, who were indicted along with him.

The case stemmed from allegations that, during new-employee recruitment in 2015 and 2016, bank executives conspired with the human resources department to change specific applicants from a rejected list to a passed list. It also alleged that executives pre-set the male-to-female pass ratio at about 4 to 1, structurally excluding female applicants.

Prosecutors said the bank chief executive obstructed hiring by directing that applicants recommended by acquaintances be accepted across multiple stages, from document screening to a retreat-style interview process and executive interviews. The deputy bank head was also accused of intervening in some stages in the same way. The bank as a corporate entity became subject to joint penal provisions over discriminatory hiring.

The first trial court found the bank chief executive not guilty on all charges. It said testimony from those in charge of hiring did not provide enough evidence to establish direct orders or collusion. It found the deputy bank head guilty of some obstruction-of-business allegations and sentenced him to 6 months in prison, suspended for 2 years. It also fined the bank 7 million won.

The appeals court reversed that decision. It found the bank chief executive effectively influenced selection of successful candidates, including during the retreat-style interview process, and found him guilty of both obstruction of business and discriminatory hiring. It sentenced him to 6 months in prison, suspended for 2 years, and imposed a 3 million won fine.

The Supreme Court reached a different conclusion. It stressed that for joint principal offenders in a conspiracy to be established, roles and mutual participation across the crime must be proven beyond reasonable doubt. It said that if a conviction is recognised based only on circumstantial factors without direct evidence, each fact must align with logic and rules of experience.

The court focused on hiring officials’ consistent testimony that they never received instructions from the bank chief executive to pass applicants who failed to meet standards, and on the point that the list of successful candidates did not change before and after it was reported. It also said there was no objective material to support the existence of an appeals-court-assumed "additional screening meeting". The assumption was that there would have been further discussion on selecting successful candidates during 40-minute delays in finalising and announcing results.

The bench said the appeals court overturned the first trial court’s assessment of evidence despite the absence of exceptional circumstances showing an obvious error, and said that violated the principles of trial-centric proceedings and direct examination. It therefore quashed and remanded the obstruction-of-business conviction for further hearing.

The guilty ruling was finalised on discriminatory hiring by recruiting after pre-setting the male-to-female pass ratio. The Supreme Court said it amounted to clear discrimination in recruitment and hiring of workers and found no legal error in the appeals court’s decision. The fine against the bank as a corporate entity was left unchanged.

Risk eased as Hana Financial steps up new businesses

The ruling cleared Ham of what had been the biggest legal risk that could have hindered his ability to remain chairman. Under the Financial Company Governance Act, a confirmed prison sentence or suspended sentence would constitute grounds for disqualification of executives, but the confirmed charge in this case resulted only in a fine.

In and outside the financial industry, analysis is emerging that the removal of uncertainty has created conditions for Hana Financial’s large strategic projects to move faster.

Ham in his New Year address presented digital finance and productive finance as core pillars of the group’s strategy and had signalled a sweeping shift. He said, "Based on Hana Financial’s stability and trust, it is not enough just to establish coin issuance and reserve management, and a secure security system." He stressed, "Through partnerships with various domestic and overseas partners for real-life linkage, we must secure diverse places of use and complete a coin distribution network, and proactively build a complete ecosystem that leads from issuance to distribution to use to circulation." He also stressed, "As the paradigm of digital finance is being reshaped, we must become designers who create new rules and lead the market, not participants who move within a given framework."

Ham also identified securing investment capabilities suited to a transition period for productive finance and strengthening asset management competitiveness as key tasks that would determine the organisation’s survival. He also outlined plans to boost capabilities across the group by fostering digital technology talent, hiring external experts and pursuing strategic partnerships in parallel.

At the centre of the strategy is the expansion of its digital asset business anchored on stablecoins. Hana Financial recently became the first among financial holding companies to team up with several regional financial holding companies, banks and savings banks to build a cooperative framework with a view to issuing a won-based digital currency. It plans to set up a separate company in the form of joint investment and move to issue coins once legal and institutional arrangements are completed.

The fact that participating financial firms evenly hold regional bases is also cited as a strategic point. The calculation is that it will build a nationwide distribution structure that can be used beyond financial infrastructure concentrated in the Seoul metropolitan area, and later expand stablecoin use to areas such as local currency and public payments. The industry views it as a move aimed at improving transaction transparency, cutting costs and helping regional economies.

Hana Financial is also stepping up efforts to secure blockchain-based financial infrastructure centred on a dedicated digital asset organisation. Last year it was already in the process of building an ecosystem that applies blockchain technology to overseas remittances and foreign exchange operations through a business agreement with Dunamu, an operator of a virtual asset exchange, and that also covers a digital asset custody and management business through a joint venture with a global custodian.

The financial industry sees Hana Financial, which had little choice but to be cautious about large-scale investment and pursuing new businesses due to legal risk, as now having more room for a more aggressive approach. Its digital finance strategy, including stablecoins that it has recently focused on, is expected to begin functioning in earnest as a new growth engine for the group. With legal uncertainty largely eased, attention is focused on whether Ham’s vision can translate into results.

Hana Financial said immediately after the ruling, "We express respect and gratitude for the fair and impartial judgment." It added, "Based on stable governance, we will contribute to the country’s future growth and stabilisation of people’s livelihoods through expanding productive finance and inclusive finance and driving digital innovation."