Photo = Prosecution Service

 

 

[Alpha Biz= Kim Jisun] South Korean prosecutors have launched a raid on a credit rating agency accused of raising corporate credit ratings in exchange for payments.

According to legal sources on March 12, the Seoul Eastern District Prosecutors’ Office’s Criminal Division 6, led by Chief Prosecutor Lee Jung-ho, conducted search and seizure operations at the headquarters of Korea Ratings Data in Yeongdeungpo, Seoul, and its Daegu branch earlier in the day.

Korea Ratings Data, a firm specializing in credit information investigation and evaluation, was established in 2005 through joint investment by state-run institutions and commercial banks. The company is suspected of selling additional financial service products worth tens of millions of won in return for upgrading credit ratings of small and medium-sized enterprises, in violation of the Credit Information Act.

Although it operates as a private company, Korea Ratings Data is often considered quasi-public in nature because its major shareholders include public institutions such as the Korea Development Bank and the Korea Credit Guarantee Fund.

Many of the company’s executives, including its current CEO, have previously held senior positions in financial institutions. The current chief executive is a former vice minister-level official from the Ministry of Finance and Economy (now the Ministry of Economy and Finance).

The firm has previously faced controversy over alleged credit rating manipulation. In 2022, ruling party lawmaker Kang Min-kuk claimed that Korea Ratings Data inflated corporate credit ratings to boost sales and sold expensive financial service products in return, even allegedly using unauthorized technical certifications to justify rating upgrades.

 

 

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