Two Former Executives of Taekwang Group Affiliate Arrested Over Alleged Unfair Loans

Court: "Concern Over Evidence Destruction"

The former CEO of a savings bank affiliated with Taekwang Group and the CEO of a real estate development company have been arrested on charges of involvement in an improper loan amounting to around 15 billion won.

[Image source=Yonhap News]

On the 27th, Shin Han-mi, the presiding judge in charge of warrants at the Seoul Western District Court, held a pre-arrest detention hearing for A (58), who served as the CEO of two savings banks affiliated with Taekwang Group, and B (65), the CEO of a real estate development company, and issued arrest warrants citing "concerns over evidence tampering."

They are reportedly suspected of participating in former Taekwang Group Management Council 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 instruct A, the CEO of the affiliated companies Goryeo and Yegaram Savings Banks, to execute loans worth approximately 15 billion won in August last year, following a request from B, whom Kim knew well, to provide funding.

At the time, the development company led by B was already burdened with debts amounting to about 35 billion won, and the collateral value was insufficient, making it difficult to obtain a loan. The savings bank's operational team submitted a credit review opinion to the credit review committee indicating that the business risk was high. Nevertheless, the loan was reportedly approved due to Kim's request.

The prosecution began the investigation in November last year after a law firm conducting an external audit of Taekwang Group detected signs of wrongdoing by former Chairman Kim and filed a complaint.

Taekwang Group stated regarding the court's issuance of the arrest warrants, "With the perpetrators of the incident now detained, we expect the investigation into former Chairman Kim, who ordered the improper loans, to accelerate."