Prosecutors Request Arrest Warrants for Taekwang Group Affiliate CEOs over Alleged Unfair Loans

Two Former Heads of Affiliate Savings Banks and One Other
Accused of Involvement in 15 Billion KRW Improper Loans

The prosecution has requested arrest warrants for the former CEO of a savings bank affiliated with Taekwang Group and the CEO of a real estate development company, who are suspected of involvement in improper loans amounting to around 15 billion won.

[Image source=Yonhap News]

The Criminal Division 4 of the Seoul Western District Prosecutors' Office (Chief Prosecutor Yeo Kyung-jin) filed arrest warrants on the 25th against Mr. A (58), who served as the CEO of two savings banks affiliated with Taekwang Group, and Mr. B (65), the CEO of a real estate development company, on charges including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.

They are reportedly suspected of participating in former Chairman Kim Ki-yoo's improper instructions and execution of loans to affiliated companies.

The prosecution is investigating allegations that former Chairman Kim used his position as chairman of the Taekwang Group Management Council to order Mr. A, CEO of the affiliated savings banks Goryeo and Yegaram, to execute loans worth approximately 15 billion won in August last year, following a request for funding from Mr. B, whom Kim knew well.

At the time, the development company led by Mr. B was already burdened with debts amounting to about 35 billion won and lacked sufficient collateral value, making it difficult to obtain loans. The savings bank's credit review team submitted an opinion to the credit review committee stating that the business risk was high. Nevertheless, the loan was reportedly granted due to former Chairman Kim's request.

The prosecution began the investigation after a law firm conducting an external audit of Taekwang Group filed a complaint in November last year upon detecting signs of former Chairman Kim's corruption.

The pre-trial detention hearing for the suspects will be held at 10:30 a.m. on the 27th at the Seoul Western District Court.