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.