(Photo= Yonhap news)

 

[Alpha Biz= Reporter Kim Sangjin] Woori Bank is once again at the center of controversy due to embezzlement amounting to hundreds of billions of won. Following a 2022 embezzlement incident of around 700 billion won, for which it received sanctions from the Financial Supervisory Service (FSS), Woori Bank finds itself entangled in another embezzlement case worth around 100 billion won. This recurrence raises fundamental questions about why such incidents seem to occur specifically at Woori Bank.

The FSS has discovered evidence of internal control deficiencies at Woori Bank again, and it plans to impose stringent sanctions if the allegations are proven through on-site inspections.

According to financial sector sources on the 13th, Woori Bank's deputy manager A at its branch in Gimhae, Gyeongsangnam-do, was found to have embezzled around 100 billion won in customer loans over a period of approximately six months from the beginning of this year. A allegedly forged loan application documents and related deposit documents to embezzle the loans and incurred losses amounting to 6 billion won by investing in overseas futures.

This significant embezzlement incident is not the first for Woori Bank. In June 2022, it was revealed that an employee, B, affiliated with the bank's corporate improvement department, embezzled a total of around 69.7 billion won in corporate convertible bond stocks under management and down payments for the sale of Daewoo Electronics, over eight occasions.

Consequently, in January of this year, the FSS issued a "institutional warning" to Woori Bank regarding the 700 billion won embezzlement incident and imposed disciplinary actions equivalent to "dismissal" on related employees.

Given that another embezzlement incident occurred at Woori Bank shortly after these disciplinary measures, doubts about the bank's internal controls have intensified.

The FSS views the recent 100 billion won embezzlement incident at Woori Bank as being attributable to systemic internal control deficiencies within the bank.

Typically, for a deputy-level bank employee like A to execute loans or deposits, approval from a team leader or branch manager is required. The FSS believes that the branch failed to comply with internal control standards and lending manuals, thereby failing to detect the embezzlement early this year.

The FSS plans to conduct on-site inspections to further understand the factual circumstances surrounding Woori Bank's embezzlement incidents and assess the adequacy of its internal controls.

If internal control deficiencies are confirmed, Woori Bank appears likely to face further disciplinary actions from the FSS. The repeated imposition of sanctions on one of the major commercial banks in South Korea due to significant embezzlements poses inevitable reputational risks and damage to its image, necessitating enhanced security measures.

 

 

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