Former top financial regulator faces summons

By Kim Rahn

The prosecution will summon a former top financial regulator for questioning over his alleged involvement in the widening corruption scandal surrounding Busan Mutual Savings Bank.

Prosecutors at the Supreme Prosecutors’ Office said Wednesday that Kim Jong-chang, a former governor of the Financial Supervisory Service (FSS), will be summoned as early as this week.

“Kim’s lawyer has said that he will present himself if called,” a prosecutor said.

Kim has been staying with his lawyer to prepare for questioning since his alleged involvement in the scandal surfaced following the summons of former Board of Audit and Inspection (BAI) official Eun Jin-soo. The former auditor was arrested Tuesday on charges of taking kickbacks from the bank in return for influence peddling.

Prosecutors will interrogate Kim about the allegation that the FSS detected the bank’s illegal lending of trillions of won and other financial irregularities in an inspection but overlooked them.

The 63-year-old is also suspected of having exercised his influence to limit audits on banks affiliated with Busan Mutual. “Some bank officials testified that Eun asked Kim to order a ‘loose’ inspection for the bank and Kim gave such orders to his staff,” the prosecutor said.

It was also confirmed that Kim was a permanent director of an investment company until a day before he was named the governor in March 2008 and the company invested 9 billion won in the bank in June last year. The prosecution is investigating the ties between Kim and the bank, which it views as “suspicious.”

An auditor of the trust firm was questioned Wednesday over the investment.

Prosecutors said Kim will be summoned as a witness but may become a suspect if allegations are confirmed.

Kim will be the third former FSS governor to face a prosecution probe for corruption committed while in office.

Meanwhile, Kim Gwang-soo, commissioner of the Korea Financial Intelligence Unit, is also expected to be called in today for questioning about his alleged role in lobbying for the troubled savings bank.

Investigators raided Kim’s office, located on the 11th floor of the Financial Service Commission’s building in Yeouido, early Wednesday morning.

About 10 former and incumbent high-profile FSS officials have been arrested or are under investigation in the scandal.