[Exclusive] Prosecution Notifies Taekwang Former Chairman Kim Ki-yu of Summons Today... Mentioned 8 Times in Indictment Over 15 Billion Won Illegal Loan

Prosecution to Summon Former Taekwang Chairman on 25th for Investigation
Evidence of Collusion in Unfair Loans at Yegaram and Goryeo Savings Bank Confirmed
Kim Former Chairman Mentioned Eight Times in Main Indictment Regarding Savings

The prosecution will summon and investigate Kim Ki-yu, former chairman of the Taekwang Group Management Council, suspected of soliciting an improper loan of 15 billion KRW, by the 25th. The prosecution previously arrested and indicted Mr. A, former CEO of Yegaram and Korea Savings Bank, known to be a close associate of Kim, and Mr. B, who borrowed 15 billion KRW, in July, focusing on proving Kim’s involvement in the conspiracy. This investigation is also expected to concentrate on finding the link among the three individuals.

According to a comprehensive report by Asia Economy, the Criminal Division 4 of the Seoul Western District Prosecutors’ Office (Chief Prosecutor Yeo Kyung-jin) notified Kim’s side to appear on the 25th for a suspect investigation related to breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. This is the second summons of Kim by the Western District Prosecutors’ Office since April. Earlier, in February, the prosecution conducted a search and seizure at Kim’s residence and office.

Kim Ki-yu, Former Chairman of the Taekwang Group Management Council [Image source = Yonhap News]

Kim is accused of soliciting two savings bank CEOs affiliated with Taekwang Group to execute loans worth approximately 15 billion KRW in August last year, at the request of an acquaintance running a real estate development company. While managing the business during the imprisonment of former Taekwang Chairman Lee Ho-jin, Kim allegedly used his position to facilitate a hasty loan to Mr. B. The Taekwang Group Management Council is a body that discusses the group’s management agenda and includes all 24 affiliates, including Yegaram and Korea Savings Bank.

In fact, the 21-page indictment on the ‘15 billion KRW improper loan’ obtained by Asia Economy mentions Kim eight times and specifies the close relationship between the 15 billion KRW borrower and Kim. According to the prosecution’s indictment, Kim “first met borrower Mr. B around 2007 at the ‘Drawing Culture’ gathering, maintaining a close friendship through playing golf together, and Mr. B used this relationship to request a loan through a formal review process while submitting false documents regarding the use of funds.”

The prosecution stated in the indictment that “the ‘Standard Loan Regulations of the Savings Bank Central Association’ require appropriate loan handling through examination and analysis of the debtor’s borrowing purpose, and investigation of the appropriateness of fund usage when a loan application is made,” but “(nevertheless, the borrower) submitted false documents regarding the use of funds by exploiting his friendship with Kim, and under the direction of Yegaram and the former CEO of Korea Savings Bank, close associates of Kim, interfered with the loan decision by delivering the documents to the credit review committee, causing financial damage to the victim savings banks.”

In a phone interview with Asia Economy, Kim stated, “Introducing loans was part of business operations, and there was absolutely no improper procedure,” adding, “I will appear before the prosecution to clarify the details.”

Meanwhile, the investigation into Kim began last November when a law firm that conducted an internal audit of Taekwang Group reported him to the prosecution on three charges: solicitation of improper loans amounting to 15 billion KRW, improper inflation of golf course construction costs, and misuse of corporate credit cards.