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Son Tae-seung, chairman of Woori Financial Group (photo = Woori Finance) |
[Alpha Biz= Reporter Kim Sangjin] The Financial Supervisory Service (FSS) is examining whether Woori Bank violated regulations by failing to report a fraudulent loan case involving former Woori Financial Group Chairman Son Tae-seung’s relatives, amounting to 35 billion KRW.
On the 20th, an FSS official stated that they are investigating "the bank’s failure to report or delayed reporting issues" related to the recent fraud allegations against Woori Bank. If it is confirmed that the bank knew of the illegal activities but did not report them to the financial authorities, further actions will be considered. Initially, the FSS had judged the incident as a loan default issue due to oversight rather than a financial accident, thus not requiring reporting.
On the 11th, the FSS announced that a routine inspection revealed evidence of 35 billion KRW in fraudulent loans provided to relatives of former chairman Son Tae-seung by a center manager at Woori Bank.
Woori Bank responded by stating that it confirmed the loans to Son’s relatives starting in January and began an internal investigation, disciplining relevant individuals in April. However, it was criticized for not reporting the issue to the financial authorities or requesting an investigation until the FSS’s routine inspection was conducted.
Woori Bank explained that they did not report the incident to the authorities, as they considered it not a financial accident but a case of poor judgment. The bank adhered to regulations stating that loan defaults due to oversight are not classified as financial accidents and that they found it difficult to identify criminal elements in their internal investigation.
However, the regulations also stipulate that if there are allegations of crimes such as embezzlement, fraud, or breach of trust, the incident should be reported as a financial accident. If Woori Bank knew of criminal involvement during its internal investigation and failed to report it, it could be considered a reporting omission.
Moreover, the regulations require financial institutions to report significant matters or incidents deemed important to the FSS, even if they do not fall under the category of financial accidents.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
