By Kang Seung-woo
The Financial Supervisory Service (FSS) is exerting more pressure on the besieged Shinhan Financial Group, as it plans to inspect the group’s banking unit next month.
“The FSS will conduct a regular inspection of Shinhan Bank on Nov. 8 following Group Chairman Ra Eung-chan on Nov. 4,” an official of the FSS said Tuesday.
The checkup of the third-largest bank is expected to last a little more than a month.
The financial watchdog will investigate whether Ra has additional borrowed-name accounts with illegitimate funds and see if he violated other financial rules.
The FSS will also see if Shinhan Bank CEO Lee Baek-soon managed Ra’s illegal accounts and was involved in more cases related with the chairman.
The audit came as the financial services company made headlines from its implosions and the financial authorities are determined to punish any and all wrongdoings.
Ra, who has headed the financial holding firm since 2001, allegedly wired 5 billion won to now-jailed businessman Park Yeon-cha through several bank accounts opened in other people’s names and he admitted to holding such false-name accounts last week.
The FSS warned Ra earlier this month that it will impose a heavy penalty on the 71-year-old on charges of masterminding irregular financial transactions, and the final decision will come at a disciplinary committee on Nov. 4.
Group President Shin Sang-hoon, 62, who has been suspended from his duties for alleged embezzlement and breach of trust, is also under investigation by the prosecution, while Lee, 58, is also involved in a legal dispute for defamation.
Along with the punishment, the FSS is now pushing the group’s board of directors to settle the issue as soon as possible.
An official of the FSS said Monday that it is desirable for its board to handle the current situation as soon as it can amid concerns that lingering internal problems will hurt the competitiveness of the group, which was highly regarded as one of the few profitable, well-managed financial groups in the nation.
Some believe that the government’s intention to settle the scandal before the G20 Summit, scheduled for Nov. 11 and 12, may have caused the increasing pressure from the FSS.
Financial Services Commission (FSC) Chairman Chin Dong-soo said that the Shinhan crisis should be put to bed ahead of the G20 Summit.
Meanwhile, the board of directors is likely to hold a meeting before the Ra probe.
“The board will not sit back,” the board of directors Chairman Jeon Seong-bin said.
“If we set a schedule for a meeting between the directors in Japan and Hong Kong, it will be held ahead of Nov. 4.”
Last week, a total of 130 Korean-Japanese shareholders, including the group’s four outside directors said that the troubled top three executives should resign due to the recent high-profile internal strife.