Photo courtesy of Yonhap News

 

 

[Alpha Biz= Paul Lee] South Korea’s financial regulator has postponed a decision on sanctions against Lotte Card following a major data breach that exposed the personal information of 2.97 million customers in the second half of last year.

According to financial authorities on February 16, the Financial Supervisory Service (FSS) Sanctions Review Committee convened to deliberate the case but failed to reach a conclusion on the level of penalties after discussions that lasted until around 8 p.m.

Both former CEO Cho Jwa-jin and newly appointed CEO Jung Sang-ho attended the hearing. However, they declined to comment to reporters following the meeting.

An FSS official said the committee would continue discussions at a later date, without disclosing further details.

The FSS conducted an intensive inspection for approximately two months after the hacking incident in September last year and reportedly identified multiple violations. Authorities are said to have raised particular concerns over internal controls, noting weaker oversight compared to other financial institutions following the company’s acquisition by private equity firm MBK Partners.

Prior to the hearing, the FSS had notified Lotte Card of a proposed maximum-level sanction, including a 4.5-month business suspension and a KRW 5 billion fine. Credit rating agencies noted that Lotte Card’s penalty level appears higher than past cases—such as a three-month suspension imposed on card issuers following a 2014 data breach—reflecting repeat violations.

While the case was initially viewed as relatively straightforward, some legal interpretations remain contested, contributing to the delay in reaching a final decision.

The sanctions agenda will be revisited at a future committee meeting. As the Sanctions Review Committee serves as an advisory body to the FSS governor, final decisions will be confirmed at a subsequent meeting of the Financial Services Commission.

 

 

 

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