Three Chinese lenders caught violating reporting obligations
이 글자크기로 변경됩니다.
(예시) 가장 빠른 뉴스가 있고 다양한 정보, 쌍방향 소통이 숨쉬는 다음뉴스를 만나보세요. 다음뉴스는 국내외 주요이슈와 실시간 속보, 문화생활 및 다양한 분야의 뉴스를 입체적으로 전달하고 있습니다.
South Korea's Financial Supervisory Service has ordered three Chinese banks operating in Seoul to take disciplinary action after they were found to have violated disclosure and reporting obligations.
The lenders in question are the Industrial and Commercial Bank of China, Agricultural Bank of China and China Construction Bank.
The FSS ordered the Chinese firms to autonomously handle their employees involved in these violation cases. Autonomous handling refers to the practice where the FSS allows a company to impose penalties autonomously according to its internal rules and regulations.
The Seoul branch of the ICBC failed to report to the FSS or disclose on the Korea Federation of Banks' website four cases of appointing and dismissing executives between January and March 2018. From August 2020 to September 2021, seven similar issues occurred.
Financial institutions are required to report the appointment or dismissal of executives within seven business days.
The Seoul ICBC branch also failed to report 43 cases of loans that were extended using a company's equity securities exceeding 20 percent as collateral, from November 2017 to May 2022.
Meanwhile, the Seoul branch of the Agricultural Bank of China was late to report nine cases of loans extended using a company’s equity securities exceeding 20 percent as collateral from December 2018 to December 2020.
China Construction Bank's Seoul branch failed to report the reappointment of its branch manager in July 2020. The bank also did not report on time the dismissal of its branch manager and the appointment of a new branch manager in March last year.
It also violated its reporting obligations for 38 loans extended using a company’s equity securities from November 2017 to December 2020. There were also seven similar cases caught from April 2021 to March 2022.
The simultaneous imposition of sanctions on Chinese banks, an unusual move, indicates the resolute stance of Korean financial authorities against disruptive behaviors in the financial market, regardless of the banks' origin.
However, some industry insiders point out that Korean financial authorities appear to apply relatively lenient penalties on Chinese banks that breach regulations when compared to the substantial fines and penalties imposed on Korean banks in China for similar violations.
Last year, Chinese financial authorities fined three Korean banks operating in China —Woori Bank, Hana Bank and the Industrial Bank of Korea — a total of 17.43 million yuan ($2.42 million) for regulatory reporting violations.
Korean banks were significantly affected by these penalties, as they were already facing challenges due to the economic downturn in China's real estate market, which resulted in a notable increase in delinquency rates.
By Song Seung-hyun(ssh@heraldcorp.com)
Copyright © 코리아헤럴드. 무단전재 및 재배포 금지.