During the four years of the 780 billion won loan fraud incident involving former Woori Financial Group Chairman Son Tae-seung, Woori Bank employees confirmed they were aware of the related loans but did not file internal reports. According to current regulatory guidelines and self-regulation, financial company employees are required to report any recognition of fraudulent loans to their company immediately, but no one adhered to this obligation. Woori Bank also has an obligation to investigate and discipline employees who have violated the internal reporting duty, but the internal control system has not functioned at all.
According to the indictment submitted to the National Assembly by the Ministry of Justice on the 13th regarding Chairman Son, the union chairman of Woori Bank reported to him in 2021, and in 2022, the head of the public relations brand group and the deputy head of the credit group reported indications of fraudulent loans to former Chairman Son. The deputy head of the credit group even delivered a specific report to former Chairman Son, stating, 'Your brother-in-law is acting as a loan broker, and problematic loans associated with him are being handled secretly.' Comprehensive results of the prosecutor's investigation suggest that a significant number of employees, including Woori Bank's management at that time, were aware of the signs of fraudulent loans.
According to the self-regulatory financial accident prevention guidelines in the banking sector, bank employees must report through internal channels if a financial accident is anticipated. Generally, banks incorporate financial accident prevention guidelines into their internal regulations. Woori Bank has also established compliance monitoring organizations at both headquarters and branch offices and is receiving internal reports. However, there have been zero instances of reports received by Woori Bank's compliance organization from 2021 to 2024 while fraudulent loans were being executed. The reports made directly to former Chairman Son by the union chairman, public relations brand head, and deputy head of the credit group do not constitute internal whistleblowing.
Woori Bank also has obligations related to internal reporting but has not complied. According to the financial company governance regulatory guidelines, banks must impose disadvantages on employees who are aware of illegal or unfair acts but do not report them. However, Woori Bank has taken no particular action against employees who have violated their internal reporting obligations. In response to why no follow-up actions were taken, Woori Bank stated, 'It would have been difficult for employees to determine if the incidents were subject to internal reporting at the time the fraudulent loans were occurring.'
Concerns have been raised that the failure of Woori Bank's internal control system to operate may have exacerbated the scale of the incident, as no internal reporting has occurred. There are also concerns that the system Woori Bank introduced after the incident may not be very reliable. Woori Bank has implemented a whistleblowing channel called 'helpline' to normalize its internal control system following the incident. This method involves receiving reports through external channels, which ensures anonymity as IP tracking is impossible. However, regardless of the internal or external situation, the disadvantages for insiders who report significantly outweigh any potential gains, making such a system potentially ineffective.
Experts argue that methods for disciplining employees who fail to report recognized irregularities should be enhanced. Sung Soo-yong, a professor at the Korea Financial Training Institute, stated, 'Even if financial accidents are thoroughly concealed by those involved, the colleagues within the bank are likely to perceive them.' He emphasized that a clear signal must be sent indicating that those who fail to report irregularities will face significant disadvantages. Professor Sung explained, 'To minimize the critical damage to the company, it is essential to detect financial accidents early. Therefore, internal reporting by surrounding employees is extremely important.'