Woori Bank Faces Audit
By Na Jeong-ju
Staff Reporter
Woori Bank faces audits for its questionable relationship with Samsung Group as circumstantial evidence shows it might have broken the law to help the country's largest conglomerate and its largest corporate client stash slush funds.
Despite its denial of such allegations, political parties have agreed on a bill to designate an independent counsel to look into how Samsung created the slush funds and where it used them.
If allegations are proven true, the country's No. 2 lender may face fines and other disciplinary measures, which can make it impossible for the company to enter new business areas and expand its client base.
Adding fuel, police said Saturday they were investigating a claim that Woori had traced bank accounts held by thousands of Samsung employees at the request of Samsung management in violation of the law.
The cases indicate Samsung used Woori as a private coffer, according to some critics.
``Samsung is not the owner of Woori, but it acted like an owner and directed wrongful transactions,'' said Rep. Shim Sang-jeong of the Democratic Labor Party, who called for strengthened rules to prevent conglomerates' ownership of banks.
Woori has long provided banking services to Samsung and its affiliates as one of their key creditors. Their business ties became even stronger when Hwang Young-key, a former secretary for Samsung Chairman Lee Kun-hee and ex-CEO of Samsung Securities, headed Woori in 2004-2007.
Hwang failed to secure another term in Woori early this year. He recently joined an election camp for Grand National Party presidential candidate Lee Myung-bak.
``There are no leads yet showing Hwang's involvement in the alleged illegal transactions between Woori and Samsung,'' an official from the Financial Supervisory Service said. ``However, Hwang may have to accept a probe in connection with the Samsung scandal because the suspicious deals occurred when he was serving as Woori president.''
Samsung is accused of having created accounts at Woori's branch in its headquarters, using the names of its employees, including Kim Yong-chul, a former executive of the group's legal department. According to Kim, Samsung stashed hundreds of billions of won in slush funds at the accounts and offered bribes to politicians, prosecutors, judges, tax officials and journalists.
``We have nothing to tell you about the scandal. There was an order from the management that we stay away from external activities,'' a Woori official said.
The FSS said it will look into whether the Samsung accounts in the names of Kim Yong-chul and other executives were set up in accordance with laws. Kim has claimed Samsung opened the accounts without his authorization, but Samsung and Woori said Kim set them up through an agent.
Should a third person _ say a family member or a business partner _ wish to set up an account on behalf of someone, the third person must hand in the principal's authorization notes. Banks are then required to call the principal to verify their authorization before setting up the account. Samsung said it did not remember whether Woori followed the rules.