AIIB in search for new risk chief

The bank’s Korean chief risk officer has applied for a lengthy leave of absence, which is widely regarded as a resignation.

The Asian Infrastructure Investment Bank (AIIB) is looking to recruit two senior executives, one of them to replace its absent chief risk officer. 

The Beijing-led bank has advertised two new positions of vice president for finance and director general for risk management on its website. The former is expected to lead in financing and treasury management, while the latter will lead the development and implementation of a risk governance framework, covering both operational and financial risk, the website states. The new risk director general will report to the president directly. 

The recruitments come after Kyttack Hong, the bank’s vice president and chief risk officer, applied for a leave of absence for personal reasons at the end of last month. His six-month leave is widely regarded as a resignation, as the bank carried out organisational changes, demoting the chief risk officer role to the rank of director general. 

Jin Liqun, president of AIIB, said in an interview with CNBC that the bank would quickly replace Hong without causing any disruption. It is unclear whether the new head of risk management would be a Korean or not. Korea, with a 3.81 percent stake, is the fifth-largest shareholder in AIIB. 

Hong, having joined the AIIB since February, was former chairman and chief executive of the Korea Development Bank (KDB). He is under scrutiny following the release of an audit in Korea last month, which exposed his troubled supervision of repeated loans to shipbuilder Daewoo Shipbuilding and Marine Engineering during his time in the KDB office. The shipyard was hit hard by a global downturn in the industry and has posted massive losses. 

“AIIB is aware of press reports related to audit findings in Korea connected to Hong’s previous position. These reported findings do not relate to the work he has undertaken at AIIB,” said an AIIB spokesperson in an emailed response.