Current and Former IBK Employees Arrested Over 80 Billion Won Improper Loan Allegations

Current and former employees of Industrial Bank of Korea (IBK), who are suspected of being involved in improper loans worth tens of billions of won, have been arrested following the prosecution's repeated requests for arrest warrants.

On June 12, Park Jungho, the chief judge in charge of warrants at the Seoul Central District Court, issued arrest warrants for IBK employee Cho and former employee Kim, both of whom had been subject to renewed arrest warrant requests on charges of breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes and fraud. Judge Park stated that the arrests were made due to concerns about destruction of evidence and risk of flight.

Employee of Industrial Bank of Korea suspected of improper loan attending the warrant hearing. Yonhap News

Previously, the Financial Supervisory Service reported to the prosecution that improper loans amounting to 88.2 billion won had been uncovered, involving current and former IBK employees, their spouses, colleagues who joined the bank at the same time, private social groups, and business partners. Kim, a former IBK employee, was found to have operated real estate agencies and judicial scrivener offices under borrowed names. From June 2017 over a period of seven years, Kim allegedly colluded with or received assistance from his spouse, who was a loan examiner at the screening center, and 28 other employees with whom he had personal ties, to secure improper loans totaling 78.5 billion won.

However, it is reported that the prosecution specified a lower amount than 78.5 billion won in the arrest warrant.

During the investigation, the prosecution also uncovered evidence that Cho received money and valuables from Kim in exchange for providing loans, and included this in the arrest warrant request.

Earlier, after searching IBK’s headquarters and other locations, the prosecution had requested arrest warrants for Cho and Kim, but in April, the court rejected the requests, citing concerns over infringement of defense rights. In response, the prosecution reapplied for the warrants, taking into account the large scale of the crime and the fact that arrest warrants had recently been issued in similar cases.