Citigroup continues merger plan with KorAm

Citigroup continues merger plan with KorAm

Agence France-Presse, Seoul

U.S. financial giant Citigroup on Friday pushed ahead with a union-opposed merger with KorAm Bank by approving a plan to duelist the South Korean lender from the local bourse.

KorAm's union, which has led crippling industrial action for more than two weeks, immediately urged Citigroup to refrain from relisting South Korea's sixth largest lender.

"Shareholders approved the plan to delist KorAm from the Korea Stock Exchange today, paving the way for its merger with Citigroup's South Korean unit," KorAm spokesman Lee Sang-On said.

Citigroup recently acquired a 99.33 percent stake in KorAm.

He said KorAm plans to file an application with the stock exchange Friday, which if approved, would allow the delisting to take place next week after 14 years of trading on the boards.

But KorAm union leaders denounced the Citigroup move during a news conference held at a union education center on the southern outskirts of Seoul where about 2,400 workers were on strike.

"Citigroup must immediately scrap its planned delisting of KorAm and guarantee independent management at KorAm," the union said in statement.

Citigroup acquired KorAm Bank in April but its push to merge it with U.S. company's existing operations in South Korea has alarmed workers who fear job losses.

KorAm union leaders are concerned the delisting and planned merger will lead to massive layoffs and so have been demanding job security for workers through independent management from Citigroup.

The workers voted for an indefinite strike on June 25, effectively shutting down nearly 80 percent of KorAm's 225 branches, with about 2,600 of 3,828 employees joining the walkout.

The strike at KorAm is the longest industrial action in South Korea's banking sector since the eight-day walkout after the merger of Kookmin Bank and Housing and Commercial Bank in 2000.

Despite talks between labor and management negotiators, both sides have failed to narrow the gap over the union demands that Citigroup guarantee job security and an 8.6 percent pay rise for workers.

There were no signs of resuming talks between labor and management representatives to end the industrial action at KorAm.

South Korea's government has repeatedly warned it could intervene in the prolonged industrial action, as police has already secured arrest warrants for five unionists leading the strike at KorAm.

Finance and Economy Minister Lee Hun-Jai had hinted at using police to disperse about 2,400 striking workers when they had launched a sit-in protest at the bank's headquarters in central Seoul.

KorAm's union had workers end their sit-in protest at the headquarters Tuesday and move to a labor training center on the southern outskirts of Seoul to avoid possible police action.

The Korea Financial Industry Union, which has 85,000 banking workers nationwide, has threatened to launch a general strike on July 13 in support of the union at KorAm.