KB subcontractors raided over suspicious deals

By Jung Min-ho

Prosecutors raided the offices of subcontractors of KB Financial Group Thursday as part of an investigation into suspicious KB business deals.

According to the Seoul Central District Prosecutor’s Office, prosecutors are investigating whether KB Chief Information Office Kim Jae-yeol exerted illicit influence when companies to enhance the telecommunication systems of all KB branches nationwide were selected.

Also, investigators are looking into whether former KB Chairman Lim Young-rok was involved in the contracts.

The firm invested about 130 billion won ($ 123 million) for the upgrade, which started 2012.

According to the prosecution, investigators have secured computer hard disks and internal papers at the IT services subcontractors’ offices in Gangnam, southern Seoul.

Prosecutors are focusing their investigation on whether there was any illicit tradeoff between the KB executives and the companies.

Already, prosecutors have reportedly secured testimony that Kim pressured bank officials to choose the companies as its suppliers.

Those involved are expected to be summoned for questioning sometime next month.

This comes after the prosecutors raided KB Kookmin Bank’s computer center in Seoul last months over alleged irregularities in the bank’s introduction of a new computing system.

Kim and three other executives are suspected of concocting a report written by a consulting firm to change from an IBM-based mainframe system to a Unix one.

The four also allegedly fabricated and submitted a benchmark test for the Unix system without actually conducting one.