Kookmin punished for embezzling housing fund

By Yoon Ja-young

KB Kookmin Bank has had its operations of housing-deposit savings and housing-bond funds suspended as a penalty for the embezzlement of funds by its staff.

The Ministry of Land, Infrastructure and Transport said that it held a committee meeting where the decision to impose a suspension of operations from April 1 to June 30 was taken.

The government set up the housing funds in 1981, to promote the construction of homes and housing subsidies for the working class. Six banks including Kookmin Bank were assigned to manage the funds, whose asset amounts to 104 trillion won with credit of 81 trillion won as of the end of 2013.

However, a number of Kookmin Bank staff members embezzled 11.2 billion won from the funds between 2010 and 2013. They reportedly forged bonds and converted them into cash.

After an inspection by the Financial Supervisory Service, two of the staff were imprisoned.

“Considering the gravity of the incident, the committee considered imposing stronger penalties such as a longer suspension of operations,” an official at the ministry said.

“However, it was set at three months taking into account that the bank has made efforts to prevent the recurrence of such incidents by strengthening its internal regulatory system,” he added.

The ministry said that as the bank won’t be providing these housing services, customers should visit the other banks ― Woori, Shinhan, Hana, IBK and Nonghyup.