The Korea Herald

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Chey under probe for illegal loans

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Published : Aug. 16, 2011 - 19:41

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SK Group chairman Chey Tae-won is under probe for allegedly taking out loans from a local savings bank, using borrowed names, a local daily reported Tuesday.

According to the JoongAng Ilbo, investigators at the Seoul Central District Prosecutors’ Office have detected some suspected transactions in bank accounts of the tycoon between 2008 and 2010. They suspect that Chey had taken out 100 billion won ($93 million) in loans from Mirae Mutual Savings Bank and that some 80 billion won of the money was under names of different people, including his younger brother and group vice chairman Jae-won.

The investigators were looking into suspicions surrounding Chey’s recent catastrophic investment in futures, which is said to have resulted in a loss of nearly 100 billion won.

The prosecution secured a testimony from a staff member at Mirae bank saying that the 100 billion won was all for Chey.

“The chairman used borrowed names to take out loans exceeding the limit set by the savings bank law,” the bank employee was quoted as saying.

Korean savings banks are prohibited by law to lend more than 20 percent of their equity capital to a single borrower. For Mirae, that limit was 20 billion won.

By Lee Sun-young (milaya@heraldcorp.com)