Abuse of real-name system

Shinhan Financial Group Chairman Ra Eung-chan faces a probe for his alleged violation of the real-name financial system. The Financial Supervisory Service has asked him to submit documents on his financial transactions in 2007. It is a litmus test whether a violator of the real-name system should head one of the nation’s largest financial groups.

Regulators will team up with prosecutors to look into the allegation early next month. The focus of the probe is the fact that he withdrew 5 billion won from a borrowed-name account in 2007 and delivered the money to Tawkwang CEO Park Yeon-cha, who is at the center of a bribery scandal involving former President Roh Moo-hyun and his cronies last year. Prosecutors found the fact but have not concluded whether Ra violated the real-name rule. The hasty conclusion came following the sudden suicide of former President Roh during an investigation in May last year.

The regulators had long dragged its feet in examining Ra’s alleged rule-breaking. Apparently under pressure from the opposition Democratic Party, it reluctantly started the audit.

What the FSS should do should not be limited only to the simple issue of whether he violated the real-name system. The probe should also verify the source of the money. Is it from either his personal account or a borrowed-name account the bank uses. Prosecutors must clarify why Ra delivered the money to Park. Ra has so far denied the allegation that he wanted the money to be delivered to the Roh camp. Without clearing away these suspicions, Ra might no longer continue his job.