[2021 National Audit] KDB Industrial Bank: "No Management Team Intervention in HMM Surplus Fund Transfers"

On the 15th, Lee Dong-geol, President of the Korea Development Bank, is giving a business report at the National Assembly's Political Affairs Committee audit held in Yeouido, Seoul.
[Photo by Yonhap News]

[Asia Economy Reporter Song Seung-seop] KDB Industrial Bank responded that the use of funds from a company under restructuring management to boost performance was a decision made independently by HMM.

At the National Assembly's Political Affairs Committee audit on the 15th, Kang Min-guk, a member of the People Power Party, pointed out that 67.4% of HMM's surplus funds amounting to 4.0308 trillion won were deposited in KDB, but the income was only 2.7 billion won excluding products maturing before the due date. Kang claimed, "Most of the surplus funds were deposited in KDB's low-interest deposit products, and there seems to be a moral hazard involving the fund management team dispatched by KDB to HMM during this process."

In response, Lee Dong-geol, Chairman of KDB Industrial Bank, rebutted, "Any company with surplus funds receives quotes for deposit products from major domestic banks and subscribes to favorable products," adding, "The low interest rate is because the funds are managed as short-term capital."

He further explained, "The management team does not order funds to be given to KDB," and "According to regulations, funds are executed through KDB's management team, but they do not intervene in business purposes unrelated to restructuring."

He added, "We will review the concerns once again."