Government to Investigate Allegations of Illegal Lending by Myeongnyundang

The government has launched a fact-finding investigation into allegations that Myung Ryun Dang, the operator of Myung Ryun Jinsa Galbi, engaged in high-interest lending to franchisees using funds borrowed from the Korea Development Bank.

According to the financial sector on November 11, the Financial Services Commission is investigating cases where franchise headquarters have improperly used policy loans from state-run banks such as the Korea Development Bank.

Previously, allegations were raised in political circles that Myung Ryun Dang, through affiliated lending companies, lent startup funds to franchisees at high interest rates in the mid-10 percent range. There were suspicions that Myung Ryun Dang used policy loans obtained from the Korea Development Bank for profiteering.

In response, the Financial Services Commission is reportedly planning to investigate franchise headquarters that have received policy loans from the Korea Development Bank and other state-run banks.

Regarding the criticism that Myung Ryun Dang evaded financial authorities' oversight by operating multiple small-scale lending companies, the government is also pushing to revise the Lending Business Act.

For cases suspected of "split lending operations" like Myung Ryun Dang, measures are being discussed to allow the Financial Supervisory Service to conduct investigations ex officio, and to apply total asset limit regulations even to small lending companies that are not registered with the financial authorities.