former Woori Financial Group Chairman Sohn Tae-seung (Woori Financial Group)

 

[Alpha Biz= Reporter Kim Sangjin] Woori Bank has been found to have provided a total of 61.6 billion won in loans over the past four years to corporations operated by relatives of former Woori Financial Group Chairman Son Tae-seung. More than half of these loans were issued without following standard procedures or guidelines during the review and post-loan management phases.

According to the Financial Supervisory Service (FSS) on the 11th, Woori Bank issued 45.4 billion won (23 cases) in loans to 11 borrowers connected to Chairman Son from April 3, 2020, to January 16, this year. Additionally, 16.2 billion won (19 cases) in loans were provided to 9 borrowers suspected to be the actual users of the funds.

Before Son became the bank's chairman in 2017 and subsequently the group chairman in January 2019, the loans to these related parties were only 450 million won (5 cases). After Son gained influence within the bank, the amount of loans increased dramatically. Son served as both Woori Bank Chairman and Woori Financial Group Chairman until his retirement in March last year.

The FSS reported that 57% of these loans (35 billion won, 28 cases) did not adhere to standard loan criteria or procedures, including failures in document verification, improper collateral or guarantees, violations of loan review procedures, and inadequate checks on the use of funds.

Many of these loans have become problematic. As of August 9, amounts overdue (1 to 3 months) or classified as bad loans (more than 3 months) total 19.8 billion won. Considering collateral availability, the estimated actual loss is between 8.2 billion and 15.8 billion won.

The loans were largely handled by A, the head of the Seolleung Financial Center, who had ongoing dealings with Son's relatives. Woori Bank conducted internal inspections from January to March of this year, resulting in disciplinary actions against eight employees, including the center head. Further inspections of all loans related to Son's relatives were conducted from May to June.

Financial authorities have been conducting on-site inspections since early this year based on tips about improper lending practices. The FSS plans to refer those involved to the prosecution on charges including document forgery and fraud.

 

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