Former Chairman Sohn Tae-seung's Relatives 'Unfair Loan Suspicion' Spreads
FSS "Actively Cooperating with Prosecutors' Investigation"...Regular Inspection Extended
Holding Company Chairman and Bank President's Offices Also Raided...Various Documents Secured
Investigation Expands to Post-Processing of 'Unfair Loans'
The Financial Supervisory Service (FSS) stated that it will actively cooperate to ensure that the investigation proceeds smoothly in relation to the prosecution's additional search and seizure of the holding company and bank concerning allegations of improper loans involving relatives of former Woori Financial Group Chairman Sohn Tae-seung. This is the first time the prosecution has conducted a search and seizure of Woori Financial Group.
On the 19th, the Financial Investigation Division 1 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Kim Su-hong) conducted search and seizure operations related to illegal loans and subsequent measures at Woori Bank, including the office of the Woori Bank President, the office of the Woori Financial Group Chairman, and departments related to loans at Woori Bank headquarters. It is reported that prosecutors and investigators secured internal documents, approval records, and electronic data.
In response, the FSS explained, "We have closely cooperated with the prosecution by providing necessary materials for the investigation regarding the improper loans involving relatives of the former Woori Financial Group Chairman," adding, "We will continue to actively cooperate to ensure that the prosecution's investigation proceeds without any obstacles."
The FSS had previously confirmed that Woori Bank and other affiliates extended loans totaling around 60 billion KRW to corporations and individual business owners related to relatives of former Woori Financial Group Chairman Sohn Tae-seung and conducted an investigation. The FSS reported to investigative agencies that approximately 35 billion KRW was deemed to be improper loans.
In August, the prosecution also conducted search and seizure operations at eight offices, including Woori Bank headquarters and Seolleung Financial Center, as well as four residences of individuals involved in the case. This time, the scope was expanded to include the offices of the Woori Financial Group Chairman and the Woori Bank President, indicating that the prosecution is closely monitoring not only the improper loan allegations but also Woori Bank's subsequent handling process.
Furthermore, it is reported that the prosecution has newly identified additional large-scale illegal loan allegations beyond those confirmed by the FSS investigation. The prosecution believes that during the loan process to relatives of former Chairman Sohn, documents were omitted, and collateral and guarantees were not properly evaluated. In particular, there is suspicion that the loan funds were misused for purposes other than intended.
Meanwhile, the FSS has decided to extend the regular inspections of Woori Financial Group and Woori Bank, which have been ongoing since early October. The FSS conducted an on-site inspection in June to investigate allegations of improper loans involving relatives of former Chairman Sohn and carried out a re-inspection in August. It is reported that the current regular inspection revealed inadequacies in the management of the Common Equity Tier 1 (CET1) capital ratio of Woori Financial Group and Woori Bank.
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