Industrial Bank of Korea (photo=IBK Industrial Bank of Korea)

 

 

[Alpha Biz= Kim Jisun] Arrest warrants for current and former employees of Industrial Bank of Korea (IBK), who are under suspicion of involvement in an ₩80 billion (approximately USD 58 million) improper loan scandal, have been dismissed.


On April 28, Judge Jeong Jae-wook of the Seoul Central District Court, who is in charge of reviewing warrants, rejected the prosecution’s requests for arrest warrants for Mr. Cho, a current IBK employee, and Mr. Kim, a former employee. Both individuals are under investigation for alleged violations of the Act on the Aggravated Punishment of Specific Economic Crimes (fraud).


Judge Jeong explained the dismissal regarding Mr. Cho as follows:
“In light of the interests and involvement of multiple individuals in the issuance of letters of credit, loans, and bill discounting processes, the submitted evidence and testimonies alone do not sufficiently establish the extent or nature of the suspect’s involvement or fraudulent intent as described in the warrant application. Considering the progress of the investigation, detaining the suspect at this stage could excessively restrict his right to defense.”


Regarding Mr. Kim, Judge Jeong stated:
"While the overall facts are largely acknowledged, there remains room for legal debate on the fraud charge and questions of collusion concerning the alleged evidence fabrication charge. It is necessary to guarantee the suspect’s right to a fair defense."



Earlier in January, IBK disclosed that it had suffered a financial loss amounting to KRW 23.95 billion (approximately USD 17.3 million) due to breach of duty and other misconduct. Subsequent on-site inspections by the Financial Supervisory Service (FSS) uncovered 58 instances of improper loan issuance, involving current and former IBK employees, their families, former classmates, and acquaintances from private social groups. The FSS announced that the total amount of improper loans had reached KRW 88.2 billion (approximately USD 64 million).



According to the FSS, Mr. Kim allegedly operated a real estate agency and a law office under borrowed names, and over the course of seven years since 2017, obtained improper loans amounting to KRW 78.5 billion. During the investigation, prosecutors reportedly found evidence suggesting that Mr. Cho received monetary benefits in return for facilitating loans to Mr. Kim.



The prosecution, acting upon the FSS’s request for investigation, launched a full-scale probe last month, executing search and seizure operations at more than 20 companies related to loan officers and borrowers in Seoul, Incheon, and other locations. On April 1, the investigation expanded to include a search of IBK’s headquarters.

 

 

 

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