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BNK Kyongnam Bank under fire for repeated employee misconduct
BNK Kyongnam Bank CEO Ye Kyong-tak / Korea Times file
By Lee Kyung-min
BNK Kyongnam Bank is coming under heavy criticism for internal control failures, as clearly illustrated by cases involving an employee embezzling 300 billion won ($231 million) and a senior official trading stocks using borrowed names, according to market watchers, Wednesday.
The Financial Supervisory Service (FSS) said the bank based in South Gyeongsang Province was fined 110 million won and given a warning.
The penalty followed the FSS investigation of a former branch manager at the bank.
The man, whose identity has been withheld, placed 193 stock trading orders totaling 210 million over 53 days from April 2018 to July 2020. He opened the securities trading account using his mother-in-law’s name.
He made it look like the account was created at the mother-in-law’s request and forged her signature without her consent.
The man failed to send securities trading statements to his mother-in-law seven times.
This is the latest case of employee misconduct at the bank.
A man surnamed Lee, 51, financial investment department head at the bank, also stands trial on charges of embezzling over 300 billion won.
The prosecution believed the embezzled amount was 143.7 billion won at the time of indictment in September. However, further investigation uncovered that he had embezzled an additional 165.2 billion won.
According to prosecutors, Lee conspired with a Korea Investment & Securities trader surnamed Hwang, 52, to forge financial documents to wire 228.6 billion won to a paper company between November 2014 and July last year.
They used a combined 37.8 billion won for personal expenses over the past 14 years, buying real estate and luxury goods. Their spending each averaged 70 million won per month. Hwang was indicted on a similar charge.
Meanwhile, BNK Kyongnam Bank sold 37.63 billion won in private equity funds to 195 retail investors from March to August 2019 in what the financial authorities have concluded was an unscrutinized practice of irresponsible sales.