Coast Guard nabs suspended bank CEO fleeing to China

By Korea Herald
  • Published : May 6, 2012 - 17:49
  • Updated : May 6, 2012 - 20:07
Mirae Savings Bank chief executive Kim Chan-kyong was arrested while attempting to leave the country Friday with 20.3 billion won ($17.9 million) of the suspended bank’s funds, police said Sunday.

Mirae Savings Bank is one of the four savings bank suspended by the Financial Services Commission on Sunday for failing to meet the capital adequacy ratios recommended by the Bank for International Settlements standards.
Clients of Mirae Savings Bank read a notice posted on the door of the bank’s main branch in Jeju on Sunday. (Yonhap News)

The other savings banks suspended by the FSC are Hanju Savings Bank, Korea Savings Bank and the Solomon Savings Bank.

According to the police, Kim was arrested by the Korea Coast Guard at about 8:30 p.m. Friday while attempting to leave for China on a small boat from a port in Hwaseong, Gyeonggi Province.

Kim was due to present Mirae Savings Bank’s plans for normalizing operations to the financial authorities at 9 a.m. Saturday.

According to the financial authorities, Kim took out the money from Mirae Savings Bank’s money market deposit account at Woori Bank after working hours on Thursday.

Kim has since been handed over to the prosecutors investigating possible corruption at savings banks with financial irregularities.

With the FSC suspending operations of the four banks for six months, the prosecutors have also placed travel bans on executives of the banks including Kim as they prepare to look into the latest savings banks to be suspended.

The investigators are also expected to summon concerned individuals for questioning and to search the banks’ premises this week, beginning the probe in earnest.

“Formal investigations will begin as soon as complaints are filed (by the financial authorities). The investigation will look into the banks from multiple angles including the scale of illegal loans and the corruption of the management,” an unnamed prosecution official was quoted as saying in news reports.

The prosecutors are reported to be planning to concentrate on unearthing evidence of the banks’ largest shareholders being involved in illegal loans, violations of the Mutual Savings Banks Act and possible embezzlement and dereliction of duty by the management.

The Financial Supervisory Service is reported to have asked prosecutors to investigate the banks after it uncovered evidence of irregularities such as loans exceeding the legal limits and illegal loans using accounts set up under borrowed names.

With investigations into suspended savings banks last year uncovering complex bribery and corruption scandals, the probe into the four newly suspended savings banks could result in more political scandals.

Investigations into savings banks suspended last year including Samwha Mutual Savings Bank and Busan Savings Bank revealed deep-running illegal practices involving banks’ officials as well as individuals with connections to high levels of government including Kim Jae-hong, one of first lady Kim Yoon-ok’s cousins.

By Choi He-suk  (