Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
IBK Capital, Mercedes-Benz Financial fined for flouting regulations
The Financial Supervisory Service headquarters in Seoul. / Korea Times file
By Park Jae-hyuk
By Park Jae-hyuk
IBK Capital, Mercedes-Benz Financial Services Korea and nine other lenders were fined in early August for violating the Specialized Credit Financial Business Act, according to the Financial Supervisory Service (FSS), Wednesday.
IBK Capital, a subsidiary of the state-run Investment Bank of Korea (IBK), was fined 76.5 million won ($63,000) for not following a procedure required when acquiring shares issued by its major shareholder.
From April 4, 2016, to June 28, 2017, the company acquired shares worth 9.13 billion won that were issued by IBK Capital Myanmar, an affiliate company of IBK. The amount exceeded the maximum limit of 1 billion won.
IBK Capital, however, did not notify the FSS governor of its acquisition or make a public announcement via its website.
The FSS also issued warnings to two IBK Capital employees.
Mercedes-Benz Financial Services Korea, a local subsidiary of Daimler Financial Services, was slapped with a 23.2 million won fine for not making a public announcement on its extension of credit worth 1.3 billion won to its largest shareholder, Daimler AG's affiliate firm.
Among the 11 lenders that faced the financial watchdog's punishment, Widwin Investment received the heaviest fine ― 529.5 million won.
According to the FSS, the company extended 45.3 billion won in credit to its largest shareholder, Widwin Holdings, from September 2014 to July 2018, which exceeded its equity capital.
Under the current rule, a private investment and financing firm is not allowed to extend credit beyond its equity capital to its major shareholders. It must notify financial authorities of any credit offerings to its shareholders.
Other firms the FSS punished include JM Capital, Synergy IB Investment, Welrix Capital, KAIC Capital, Q Capital Partners, Okay Capital, CNH Capital and Hyosung Capital.