BBCN Bancorp in Los Angeles is getting more criticism from former directors who voted against its pending purchase of Wilshire Bancorp.
The ex-directors – C.K. Hong and Kiho Choi – are taking issue with the $7.9 billion company's corporate governance and the leadership of Chairman and Chief Executive Kevin Kim. They have also accused BBCN of misleading investors about their reasons for resigning from the board last month.
BBCN, meanwhile, claims that the men only resigned after they were informed of plans to reduce the size of the board and to exclude them from the slimmed down body.
Choi on Friday sent a scathing letter to Kim that took issue with how BBCN portrayed his resignation in a regulatory filing last week. In that filing, BBCN said that Choi, a certified public accountant, had sent a message "noting appreciation for the opportunity and experience of serving" while "wishing the best for the company." The filing made no mention of any disagreements.
"In my short note to you following my resignation, I did not feel the need to revisit the disagreements I have had with you and the board during my tenure," Choi told Kim in his letter. BBCN's decision to "ignore these known disagreements … was misleading at best."
Choi, in his new letter, echoed the views of Hong, another ex-director who said in a letter attached to last week's filing that he resigned due to concerns over corporate governance. BBCN said in its amended filing that Choi and Hong voted against its pending $1 billion purchase of Wilshire, which is also based in Los Angeles.
BBCN, in last week's filing, said that Hong resigned after being told about plans to essentially remove him from the board.
Choi took issue with that language, too.
"The implication that Mr. Hong resigned because he was not going to be re-nominated to the board and the quotation of a polite phrase from my message to you confirming my resignation … were obvious acts of misdirection," Choi wrote to Kim. "To be clear, my resignation, like Mr. Hong's, was because of our disagreements with the company's corporate governance practices under your leadership."
BBCN's amended filing also included a new letter from Hong expressing "strong disagreement" over language in the original filing.
The first filing "stated that I resigned because I would not be recommended for reelection," Hong, chairman and CEO of a publicly traded technology firm, wrote in a letter to Kim. "This was obviously done to create the false impression that I resigned for reasons other than the reasons set forth in my letter to you."
Hong, who called the first filing "intolerable," also claimed that he never received a copy of that filing.
BBCN said in its amended filing that it sent a copy of the original report to Hong's business email "during regular business hours on the same day it was filed with" the Securities and Exchange Commission. BBCN said it "did not receive any notification of a delivery failure with respect to such email."
BBCN, for the first time, stated that Choi resigned after being told that he would not remain on the board. The company also pointed out that Choi's original email did not state any disagreement with its operations, policies or practices.
BBCN is set to cement its status as the nation's biggest Korean-American bank by buying the $4.7 billion-asset Wilshire.
Hanmi Financial, also in Los Angeles, made a public overture to merge with BBCN, revealing that the company had spurned private efforts to discuss a combination. The $4.2 billion-asset Hanmi rescinded its proposal shortly after the BBCN-Wilshire deal was announced.