Chohung Bank staff scuffle with South Korean riot police

Hundreds of Chohung Bank staff scuffled with riot police yesterday after a rally denouncing the South Korean government's decision to push through the sale of the state-owned bank, witnesses said.

Riot police using plastic shields formed a tight human barricade to block about 500 union members from marching out of their main office in Seoul.

Police also stopped union leaders from carrying boxes packed with thousands of letters of resignation from thousands of bank staff to President Roh Moo-hyun.

The union threatened to stage an indefinite strike next week unless the government scraps its plan to sell its 80.04 percent stake in Chohung to Shinhan Financial Group.

For his part, Finance and Economy Minister Kim Jin-Pyo vowed to conclude talks on the sale by the end of the month.

The sale would be a significant step in recovering part of the 157 trillion won (US$128 billion) in public funds the government spent bailing out financial firms since the 1997 Asian financial crisis. Chohung was nationalized in 1998, when the government injected 2.7 trillion won into the country's oldest and fourth largest lender.

In January, a state auction panel selected Shinhan, backed by BNP Paribas SA of France, as the preferred bidder to take over Chohung but a final contract has been delayed due to protests by unions demanding that Chohung stand alone.

Kim warned the government would take strong legal action against any illegal labor action.

In response, Chohung's union threatened to proceed with a walkout from June 25. Labor groups have supported the strike.