Photo: Shinhan Bank

 

 

[Alpha Biz= Paul Lee] SEOUL — Shinhan Bank, one of South Korea’s leading financial institutions, has disclosed a significant financial accident involving an external fraud scheme totaling approximately 2.12 billion KRW ($1.53 million). The bank officially reported the incident on the 13th, following its discovery during an ongoing legal review.

The roots of the incident trace back to March 2, 2021, but the bank only recognized the irregularity recently while monitoring the outcomes of a related civil lawsuit. According to bank officials, the case revolves around a borrower who secured a loan using property as collateral. However, a subsequent legal battle over the property's title led to a court ruling that nullified the original transfer of ownership, effectively stripping the bank of its collateral security.

While the total amount of the accident is cited at 2.12 billion KRW, the final loss figure remains unconfirmed as the bank pursues recovery efforts. "We became aware of the situation through the process of verifying civil litigation results regarding the borrower's ownership registration," a Shinhan Bank representative stated. "We are currently reviewing all available legal actions to mitigate losses."

This disclosure comes amid heightened scrutiny from financial authorities regarding internal controls and the ability of banks to detect external fraudulent activities. Shinhan Bank's late discovery—nearly five years after the initial transaction—is expected to raise questions about the industry's real-time monitoring of collateral-related legal disputes.

 

 

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