Risk Management Officer Indicted Without Detention
Former CEOs of Koryo and Yegaram Savings Banks and the CEO of a real estate development company, who are suspected of involvement in the Taekwang Group's improper loan of approximately 15 billion KRW, have been indicted while in custody.
The Criminal Division 4 of the Seoul Western District Prosecutors' Office (Chief Prosecutor Yeo Kyung-jin) announced on the 23rd that former CEO A (58) of Koryo and Yegaram Savings Banks, subsidiaries of Taekwang Group, and CEO B (64) of a real estate development company were indicted in custody on charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust). C, who worked as the Chief Risk Officer (CRO) of Koryo Savings Bank, was also indicted without detention.
They are suspected of being involved in the improper loan request of approximately 15 billion KRW linked to Kim Ki-yu, former chairman of the Taekwang Group Management Council, who was known as the 'second-in-command' of Taekwang Group. In August last year, B reportedly requested a loan from former Chairman Kim, with whom he had a close relationship, and submitted false documents during the loan application process. Subsequently, former Chairman Kim used his position within Taekwang Group to instruct CEO A of Koryo and Yegaram Savings Banks to execute a loan worth about 15 billion KRW in the same month.
At that time, despite B being in a difficult position to obtain a loan due to existing debts amounting to approximately 35 billion KRW, the loan was executed disregarding internal regulations. The savings bank staff also submitted a review opinion to the Credit Review Committee (Credit Review Committee) indicating that the business risk was high, but it is reported that A pressured the committee members before the meeting was held. In addition, B is also suspected of using a borrowed-name account to receive the loan funds and using 8.6 billion KRW of that amount for personal purposes such as stock investment.
The prosecution began the investigation in November last year after a law firm conducting an external audit of Taekwang Group detected signs of corruption involving former Chairman Kim and filed a complaint. Subsequently, on the 27th of last month, the Seoul Western District Court issued arrest warrants for A and B, citing concerns over evidence destruction.
A prosecution official stated, "After receiving complaints from the victim banks, the prosecution conducted a strict investigation through seizure and account tracking," adding, "We will continue to thoroughly maintain the prosecution to ensure that the defendants receive sentences commensurate with their crimes."
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