The Korea Herald

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Prosecutors probe former top Woori executives

By 김연세

Published : Jan. 4, 2011 - 18:25

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Woori Bank filed complaints against several former executives with the prosecution last month to investigate allegations that they issued illegal loans and took kickbacks, sources said Tuesday.

Among them were two former deputy CEOs of the nation’s second-largest bank in charge of loan business and trust business.

The two executives resigned before the bank referred them and several staffers to the Seoul Prosecutors’ Office in December, they said.

The bank’s accusation comes amid the prosecution and police’s ongoing investigation into the allegations since last July. Police took two bank employees into custody for engaging in irregular loans in November and has widened its probe.

While police had targeted only a few employees of the bank, this is the first time that its former executives have also been under the criminal investigation concerning the case.

According to the Financial Supervisory Service, Woori Bank has suffered losses worth at least 100 billion won ($89.3 million) after issuing construction project-related loans ― also known as “project financing” ― totaling about 4 trillion won.

In July, police raided the bank’s headquarters in downtown Seoul on the same allegations involving the PF loans.

As part of the improprieties, a Woori employee has been suspected of taking 2.86 billion won in bribes in 2008 in exchange for offering the PF loans for a construction company.

Though Woori Bank had said the investigation was just into several employees, the bank’s internal auditors have recently found that some senior officials were also implicated in the allegations.

A Woori official declined to reply on whether the bank was considering accusing more executives including other deputy CEOs of similar misdeeds.

It is not easy to predict when the investigation by the prosecution and police will be concluded, he added.

By Kim Yon-se (kys@heraldcorp.com)