By Yi Whan-woo

The prosecution said Wednesday it has decided not to indict three private moneylenders accused of charging excessively high interest rates to their clients.

The Seoul Central Prosecutors’ Office said it was unclear whether companies — A&P Financial, Miz Sarang, and One Cashing — charged interest above the legal ceiling of 39 percent per year. The investigation into Sanwa Money, another moneylender, is ongoing.

The four firms were accused of profiteering from usurious interest rates in February after the Financial Supervisory Service (FSS) decided to lower the annual interest cap from 44 percent to 39 percent in June 2011.

The lenders extended the maturity dates of loans worth 143.6 billion won ($125.9 million) on their customers since the FSS announcement. They then charged interest rates of 44 percent or even 49 percent depending on the date the client had borrowed the money. The total amount collected with undue interest rates was 3.06 billion won ($2.68 million), according to the FSS.

The law states that a private moneylender can receive a six-month business suspension for charging interest rates above the legal limit. The FSS accused those companies of violating the rule and moved for the three to be suspended.

The four firms, however, claimed their interest rates did not break any law and filed a suit against the financial regulators. The companies have been operating without restrictions until the present.

A&P Financial, the No. 1 market player better known for its brand Rush N Cash, collected 2 billion won ($1.75 million) from clients through excessive interest rates, while Miz Sarang mainly targets career women and reaped 200 million won ($175,430). The amount One Cashing collected in interest was 17 million won ($14,910).

The prosecution said that that the combined total of money collected by the three was “too small” compared to the scale of loans and it was difficult to prove that they did not abide by the regulations.

“The collected amount by each firm is minimal and it can’t be used as evidence to prove the allegations,” an investigator said.

The FSS said the result is “embarrassing.”

“We can’t understand how the investigators could come up with such a conclusion with all that evidence and we’ll file a complaint against the prosecution very soon,” an FSS official said.

The lending firms welcomed the prosecution’s move.

“A number of people regarded our policy as illegal. We’re happy to hear that this will now resolve such misunderstandings,” an official of A&P Financial said.

The exception however, is Sanwa Money, the runner-up in the market, which the prosecution suspects of not keeping the legal interest rate limit.