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Photo courtesy of IBK Industrial Bank of Korea |
[Alpha Biz= Paul Lee] The scale of improper loans involving former and current employees at IBK Industrial Bank of Korea is expected to grow significantly, following an extension of the Financial Supervisory Service (FSS) inspection by one more week.
According to financial sources on Sunday, the FSS has extended its inspection of IBK by another week, now scheduled to conclude on February 21. The inspection was initially set to end on January 21 but was extended twice due to an increase in the number of issues that needed to be checked. A representative from the FSS explained, "There is a large volume of material to inspect, which is why we extended the inspection by one week. We expect to conclude it by the 21st."
The FSS has dispatched personnel to both the bank's headquarters and the Gangdong branch, where the incident occurred. IBK previously disclosed a breach of duty amounting to 23.95 billion KRW in January. The bank revealed that several branches in the Gangdong area had issued improper loans to retired employees in real estate development, inflating real estate collateral values.
During the inspection, it was also discovered that some of the employees and loan recipients involved in the improper loans were related by blood. Furthermore, there are suspicions that the number of employees involved in the improper loan issue may be higher than the initially reported four.
The FSS and sources within the bank speculate that the total amount of improper loans could reach up to 100 billion KRW. The FSS is not only investigating the suspicious loans handled by the implicated employees but also expanding its review to other related cases within the bank. This intensive scrutiny has caused growing anxiety within IBK, as concerns arise that the improper loan issue could extend beyond fraud, embezzlement, breach of trust, and bribery to include mismanagement related to loans.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
