FSS wraps up probe into Shinhan chieftain

By Kang Seung-woo

The fate of Shinhan Financial Chairman Ra Eung-chan will depend on the outcome of a regulator’s investigation, the outcome of which will be revealed in a matter of days.

Ra is one of the central figures in a power struggle with his former protégé, Shin Sang-hoon, who has been relieved of his post as president of one of Korea’s leading financial services providers, which controls the top-rated Shinhan Bank.

The nation’s top financial regulator has finished its investigation into Ra for an alleged violation of the Real Name Financial Transaction Law, an official of the Financial Supervisory Service (FSS) said Wednesday.

The 71-year-old allegedly wired 5 billion won ($4.45 million) to Park Yeon-cha, the scandal-ridden CEO of Busan-based shoemaker Taekwang, in April 2007 through several bank accounts opened under other people’s names.

“The inspection team wrapped up its one-month investigation last Friday. Based on what it found, it will look into if he broke the rules,” the official said.

“We are trying to come up with an outcome as early as Oct. 12, when a National Assembly inspection of the FSS takes place, but it might take more time to reach a conclusion.”

The chairman was investigated by the prosecution last year after the financial transaction with Park because the money was withdrawn from accounts registered to other people.

While any suspicious actions by Ra were left undetermined, Park, 64, is now serving a prison term for bribing the late former President Roh Moo-hyun and his family, putting the FSS under fire.

Opposition parties claim that the FSS did not properly investigate allegations of Ra’s law violation and that he was protected by the inner circle of President Lee Myung-bak.

In the wake of strong criticism, the FSS resumed its extensive inquiry into Ra in late August, saying a number of its investigators were looking into the allegations.

Ra, a native of Sangju, North Gyeongsang Province who took the helm of the third largest financial holding firm in 2001 after heading Shinhan Bank from 1991 to 1999, was appointed in March for a fourth time, becoming the longest-tenured chief executive in the country’s financial sector.

A violation of the real-name law is punishable by up to five years in jail or a maximum fine of 30 million won. An individual who receives a heavy fine or penalty for the violation of financial rules cannot be appointed as a financial company executive.

Along with this case, Ra has drawn further censure due to his unscheduled overseas business trips.

Ra, a prime candidate as a witness in a parliamentary inspection into the recent feud within Shinhan Bank, is now in Hong Kong for overseas investor relations meetings and will fly to Washington to participate in an annual International Monetary Fund (IMF) meeting in Washington, scheduled for Friday to Sunday.

As a result, some question if he left the country to avoid being called by the National Assembly.