The challenges facing Hanmi Financial Corp. are not limited to its spotty loan portfolio.
One of Hanmi’s largest shareholders has filed a $50 million lawsuit against the Koreatown bank holding company, claiming executives’ financial mismanagement led to a sharp decline in the institution’s stock price.
Former Hanmi director John Ahn, along with his family trust, claims the bank “squandered” much of its capital “in a series of reckless and unwise investments,” leading to a decline in share price of more than 90 percent from prerecession levels. Shares, which traded at more than $20 in early 2007, closed Jan. 6 at $1.21.
The Ahn family says it owns 1.7 million shares, making it the 10th largest Hanmi shareholder. (John Ahn is not related to current Hanmi director I. Joon Ahn, according to a bank spokesman.)
Brian Cho, Hanmi’s chief financial officer, dismissed the allegations, saying the bank’s situation was no different from the challenges facing other financial institutions.
“In this country, anybody can sue for anything,” he said.
Hanmi, once the largest Korean-American bank, has endured heavy losses during the economic downturn, particularly in its commercial real estate and construction loan portfolios.
In the third quarter, the company lost nearly $15 million, its eighth consecutive losing quarter. During that stretch, Hanmi’s assets shrank from $3.9 billion to less than $3 billion, reducing it to the third largest Korean-American bank by assets.
Still, Hanmi does have reason for hope. The institution is seeking regulatory approval for a substantial investment by Seoul, South Korea, financial conglomerate Woori Finance Holdings Co. Already, Woori has invested $120 million in Hanmi, which satisfied initial regulatory requirements and returned the bank to well-capitalized status.
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