Prosecutors raid Woori Bank headquarters, offices over $26M loan scandal

Prosecutors raided Woori Bank's head branch and offices on Tuesday over the latest loan scandal involving the former chairman.

Woori Bank logo is shown at the bank's head branch in Jung District, central Seoul, on Tuesday. [YONHAP]

Prosecutors raided Woori Bank's head branch and offices on Tuesday over the latest loan scandal involving the former chairman.

The financial crime investigation team of the Seoul Southern District Prosecutors’ Office conducted search and seizure operations at eight Woori Bank operations, including its head branch in Jung District, central Seoul, as well as residences of those involved in the alleged inappropriate issuance of loans worth 35 billion won ($26.3 million).

The fourth-largest financial group in Korea has been embroiled in yet another loan scandal, as the Financial Supervisory Service (FSS) uncovered that Woori Bank recently granted 61.6 billion won in loans to borrowers with connections to its former chairman Son Tae-seung, who held the top post from January 2019 to March of last year.

According to the financial regulator, 45.4 billion won was issued to 11 borrowers where relatives of Son were incumbent or former chief executives or majority stakeholders. Moreover, nine borrowers were granted loans worth 16.2 billion won, with Son’s relatives suspected to be the actual beneficiaries of the funds.

Of the 61.6 billion won, 35 billion won were found to have been improperly granted.

Woori Bank has been aware of the inappropriate loans since earlier this year and reported employees and executives involved to law enforcement authorities for breach of duty and document forgery in August after internal investigations. The bank said that the report had been delayed as its internal investigation could not find any illegal activities aside from negligent reviews of loan applications.

However, FSS Gov. Lee Bok-hyun said during a television appearance on Sunday, “Someone responsible should be held accountable for the delay in reporting.”

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]