Shinhan caught for snooping on accounts

Regulators likely to take punitive action against leading bank

By Na Jeong-ju

Shinhan Bank may face punishment by regulators for allegedly illegally accessing hundreds of bank accounts held by its customers, including politicians, sources said Monday.

The Financial Supervisory Service (FSS) is currently looking into claims by an opposition lawmaker last year that the bank accessed bank accounts held by 22 people, including 16 well-known political and economic figures, in 2010 without their consent.

An initial probe showed the bank accessed an account of Roh Hoe-chan, a former head of the minor opposition Progressive Justice Party, but 15 other people had the same names as the famous figures, FSS officials said. They are among hundreds of victims.

The bank was sanctioned in 2010 for similar violations. It was slapped with a fine by the FSS for illegally accessing personal information of its Korean-Japanese shareholders.

“We will determine the level of punishment for Shinhan soon. It’s too early to say how it will be punished because an investigation is still ongoing,” an FSS official said. “However, if the suspicions are true, it will face much heavier sanctions than in 2010 because it was already punished for similar irregularities.”

Shinhan officials denied that the bank illegally accessed customers’ accounts, saying the examination was legal.

“Banks are allowed to check customers’ accounts if they are used for unusual transactions,” a Shinhan official said. “In the case of Roh, he received campaign funds through one of his accounts numerous times in the lead-up to the June 2010 general elections. So, one of our branches examined the transactions.”

The FSS said the account had already been registered with the National Election Commission (NEC), so it wasn’t illegal for Roh to accept funds through the account.

A source said Roh might have been the victim of illegal surveillance.

“If Shinhan accessed the account, it might have secured the list of providers of political donations to Roh, who was competing for Seoul mayor at the time,” a source said. “We can’t rule out the possibility that the data might have been delivered to a third party, and used for political maneuvering.”

In October last year, Rep. Kim Ki-sik of the main opposition Democratic Party (DP) claimed that Shinhan looked into the accounts of DP lawmakers Park Jie-won, Park Byeong-seug and Park Young-sun, former lawmakers Chung Sye-kyun and Chung Dong-young, and then-top financial regulator Kim Seok-dong, among others, in 2010.

Kim alleged that the bank committed these acts at the behest of then-Shinhan Chairman Ra Eung-chan, who had a close relationship with then-President Lee Myung-bak.

“It’s almost certain that Ra was behind the illegal access. At the time, the lawmakers were demanding an investigation into allegations that Ra bribed aides of then-President Lee Myung-bak,” Kim said during a National Assembly audit.

However, the FSS official denied these allegations, saying its probe showed the accounts Shinhan accessed had nothing to do with politicians.

“Some of the victims had only the same names as the politicians. They were different people,” the official said.