By Kim Rahn
The chief of troubled Korea Savings Bank has been arrested for illegal lending and embezzlement.
A judge at the Seoul Central District Court issued the arrest warrant for Yun Hyun-soo, Tuesday, saying that he is suspected of engaging in banking irregularities and that he may flee or destroy evidence.
With Yun’s arrest, the heads of all four savings banks recently suspended for their poor capital adequacy ratio, have been put behind bars on a variety of charges, mainly embezzlement, in a month since the suspension began on May 6.
The 59-year-old is suspected of lending 150 billion won ($127 million) illegally to 12 affiliates of Taihan Electric Wire between 2008 and 2009 through Korea Savings’ sister banks — Jinheung, Gyounggi and Youngnam.
Taihan is a large shareholder of Gyounggi and Youngnam. The law bans savings banks from lending money to their largest shareholders or to those deeply involved in the company management.
The chief also allegedly bought a resort in Aomori and a golf range in Fukuoka, Japan, by setting up a company under a borrowed name and borrowing billions of won from the bank he was running.
Yun was the last in the series of arrests.
Last Friday, Hanju Savings Bank chairwoman Kim Im-soon was put behind bars. She is suspected of having kept the money of some 400 customers in fake bank accounts to steal 18 billion won in a conspiracy with the bank’s executives.
The 53-year-old also allegedly owns a movie theater and a commercial building in Gyeonggi Province under someone else’s name, and used the properties as collateral to get an illegal loan of 30 billion won.
On May 19, chairman Lim Suk of Solomon Savings Bank was arrested on charges of lending 150 billion won illegally to unqualified businesses and embezzling 17 billion won of company funds.
Lim is also suspected of raising a 10 billion won slush fund by cooking account books, and diverting 200 billion won of company funds to take over a ship investment firm. He allegedly removed related computer files from his computers and dumped documents to destroy evidence as the investigation began.
Mirae Savings Bank chief Kim Chan-kyung was taken into custody even before the bank’s operations were suspended, because he was caught by the Korea Coast Guard on May 2 in an attempt to smuggle himself out of the country to China on a boat.
It is alleged Kim embezzled 13 billion won of company funds and created a 5.6-billion-won slush fund, as well as illegally lobbying policymakers for business favors.