By Lee Hyo-sik
The chairman of Jeil Savings Bank, suspended from operating for six months due to its poor financial condition, has been arrested on charges of embezzling customers’ money.
A joint team investigating the scandal-tainted savings banks said Tuesday that it had taken Jeil Chairman Yoo Dong-chun, 71, into custody Sunday for illegally taking out loans, creating a slush fund and spending customers’ money for his own purposes. Yoo is also the bank’s major stakeholder.
Jeil is one of seven lenders suspended by financial regulators on Sept. 18, due to a poor capital adequacy ratio as a result of illicit lending and other irregularities.
Investigators said an arrest warrant has been sought for Yoo.
The team, set up following the suspension of the secondary banks, comprises of 80 members from the Seoul Central District Prosecutors’ Office, the National Police Agency, the Financial Supervisory Service, the National Tax Service and the Korea Deposit Insurance Corp.
``We detained Yoo at 6 p.m. Sunday and questioned him about a range of illicit activity in which he was involved. We are also trying to discover more irregularities committed by him and other bank executives,’’ a member of the team said.
On Sept. 26, investigators detained Jeil CEO Lee Yong-jun and senior managing director Jang Joon-ho on charges that they had used names of more than 10,000 bank customers to illegally lend money beyond the legal ceiling for a construction project. The loan totaled 140 billion won.
They suspect that Yoo and his family embezzled customers’ money and created the slush fund to make personal investments.