By Na Jeong-ju
Former managers of Woori Bank's Tokyo branch are facing fresh allegations that they siphoned off kickbacks received from loan borrowers to a foreign country.
Officials from the Financial Supervisory Service (FSS) said Monday they are working closely with Japanese regulators to trace the money.
"There is a possibility that the former managers used overseas accounts to return the money to Korea. They may have used their friends, relatives or co-workers in doing this," an FSS official said.
These are the latest allegations raised against the branch heads, who reportedly received kickbacks from borrowers in return for providing more loans than their credit lines allowed.
A former manager, identified as Kim, 56, committed suicide in early April. Kim was a suspect in the scandal.
"We don't exactly know yet about how much money they have stashed away, and how and where they used it," the official said. "They may be keeping the money in a third country. We are collaborating with the Japanese authorities to discover the truth."
The FSS believes the Tokyo branches of Korean commercial banks were hotbeds of corruption.
"An initial probe showed the managers received about 10 percent of the loans in kickbacks," another FSS official said. "They called the money commission fees for loans, but receiving or giving these fees is illegal."
The bank first detected the fraud case involving branch heads in February through an internal audit, launched after similar violations at KB Kookmin Bank surfaced.
At the time, the bank said its Tokyo branch provided 60 billion won in additional loans to certain customers beyond their credit limits without securing additional collateral.
A former Woori Bank vice president, known as Baek, is also being investigated.
Baek was promoted to an executive post after serving as the Tokyo branch manager from 2007 to 2010. He is now heading a real estate management unit of Woori.
The FSS did not rule out the possibility that the managers provided part of the "slush fund" to their bosses in Seoul.
Regulators believe that Woori failed to detect the irregularities early due to poor internal monitoring of staff. Based on the results of the examinations, the FSS will form a joint committee with the Financial Services Commission as well as banks to set up measures to strengthen internal controls.
The FSS said that management as well as auditors will be held responsible for crimes committed by employees.
The Industrial Bank of Korea's Tokyo branch is also suspected of having extended some 10 billion won in illegal loans.
Earlier, the FSS found that officials at KB Kookmin's Tokyo branch amassed a slush fund by receiving kickbacks from borrowers in return for loans.
Former managers of Woori Bank's Tokyo branch are facing fresh allegations that they siphoned off kickbacks received from loan borrowers to a foreign country.
Officials from the Financial Supervisory Service (FSS) said Monday they are working closely with Japanese regulators to trace the money.
"There is a possibility that the former managers used overseas accounts to return the money to Korea. They may have used their friends, relatives or co-workers in doing this," an FSS official said.
These are the latest allegations raised against the branch heads, who reportedly received kickbacks from borrowers in return for providing more loans than their credit lines allowed.
A former manager, identified as Kim, 56, committed suicide in early April. Kim was a suspect in the scandal.
"We don't exactly know yet about how much money they have stashed away, and how and where they used it," the official said. "They may be keeping the money in a third country. We are collaborating with the Japanese authorities to discover the truth."
The FSS believes the Tokyo branches of Korean commercial banks were hotbeds of corruption.
"An initial probe showed the managers received about 10 percent of the loans in kickbacks," another FSS official said. "They called the money commission fees for loans, but receiving or giving these fees is illegal."
The bank first detected the fraud case involving branch heads in February through an internal audit, launched after similar violations at KB Kookmin Bank surfaced.
At the time, the bank said its Tokyo branch provided 60 billion won in additional loans to certain customers beyond their credit limits without securing additional collateral.
A former Woori Bank vice president, known as Baek, is also being investigated.
Baek was promoted to an executive post after serving as the Tokyo branch manager from 2007 to 2010. He is now heading a real estate management unit of Woori.
The FSS did not rule out the possibility that the managers provided part of the "slush fund" to their bosses in Seoul.
Regulators believe that Woori failed to detect the irregularities early due to poor internal monitoring of staff. Based on the results of the examinations, the FSS will form a joint committee with the Financial Services Commission as well as banks to set up measures to strengthen internal controls.
The FSS said that management as well as auditors will be held responsible for crimes committed by employees.
The Industrial Bank of Korea's Tokyo branch is also suspected of having extended some 10 billion won in illegal loans.
Earlier, the FSS found that officials at KB Kookmin's Tokyo branch amassed a slush fund by receiving kickbacks from borrowers in return for loans.
