Major shareholders of nine mutual savings banks with assets of more than 500 billion won ($444 million) were found to have interfered with management in an unlawful manner, the nation’s top financial regulator said Monday.

The nine savings banks are Hyundai Swiss, Hyundai Swiss 2, Shilla, Gongpyung, Seram, Pureun, Shinana, Moa and W, the Financial Supervisory Service said.

While wielding control over the secondary lenders, the major stockholders or their family members did not give any business approvals or register as executives in an attempt to evade legal responsibility over poor management.

Many of them, nevertheless, were paid hundreds of millions of won in annual salaries.

A major shareholder of Hyundai Swiss got a paycheck of 1 billion won last year. The average annual salary for the chief executives of the 10 mutual savings banks including Hyundai Swiss and Pureun amounted to 510 million won, nearly 100 million won more than that of the CEOs of major and regional banks.

Between five and seven mutual savings banks had credit delinquents as major shareholders or executives, and the FSS instructed that they be replaced.

The FSS said it ordered the nine savings banks to file a report by next week on how they plan to correct the wrongdoings, will monitor them at all times and dispatch inspectors if necessary.

At some of the savings banks, children of the major shareholders were verbally taking part in management while remaining as unregistered executives.

Others were registered executives and took away up to 1 billion won in annual wage, yet did not come to work at all or make any business approvals, the FSS said.

“Several major stockholders of the suspended savings banks did not show any sense of responsibility, denying knowledge of their illegal acts,” an FSS official said.

“We believe the major shareholders’ wrongful intervention in management could lead to other illegal acts, and therefore ordered them to fix it.”

Twenty mutual savings banks have been suspended since last year including four in May, and some of their major shareholders have been jailed on charges of bribery, embezzlement or breach of trust.

By Kim So-hyun (sophie@heraldcorp.com)