The amount of the improper loan incident at the Industrial Bank of Korea has been found to be 882 billion won, which is about 600 billion won more than the initially reported 240 billion won. According to the Financial Supervisory Service inspection results, a retired employee of the Industrial Bank of Korea colluded with current employees such as their spouse and a colleague to inflate real estate collateral values and either receive or facilitate improper loans over a period of seven years. It was also revealed that this employee had secured a bank branch within a building they owned through lobbying.
According to materials distributed by the Financial Supervisory Service on the 25th, which included recent inspection cases regarding improper transactions with stakeholders, the amount of improper loans involving former and current employees at the Industrial Bank of Korea is 882 billion won, with 58 incidents accounted for. The amount of the incident disclosed by the Industrial Bank of Korea in January was 239.5 billion won.
A former employee, identified as A, who worked at the Industrial Bank of Korea for 14 years, received or facilitated improper loans worth 785 billion won (51 cases) over a period of seven years by conspiring with numerous employees with whom they formed connections through their spouse, a colleague, and informal gatherings. The incident period stretches from June 2017 to July 2024, during which falsified loan-related evidence and own funds were presented, yet the bank employees responsible for the review overlooked these discrepancies and collaborated to approve the improper loans.
A's spouse, a reviewer at the review center, approved improper loans amounting to 6.4 billion won between September and November 2018 to allow A to purchase land without using own funds, utilizing falsified documentation. Additionally, A falsely created a funding plan to receive 5.9 billion won in improper loans for construction expenses.
It was also discovered that A solicited improper favors from an executive identified as B to secure a bank branch in a knowledge industrial center owned by A. Despite opposition from staff, B ordered a reassessment four times and established the branch in A's owned building. After the branch was opened, A disguised the employment of B's child at A's owned company and paid a salary for two years.
A provided golf entertainment to several employees while hiring some of their spouses as employees. Eight individuals involved in the improper loans at the Industrial Bank of Korea are accused of receiving 1.57 billion won in kickbacks through their spouses being employed at companies owned by A. Additionally, it was reported that 23 individuals, including 10 bank employees related to the improper loans, received golf entertainment both domestically and in the Philippines.
Despite confirming these facts through tips, the Industrial Bank of Korea was caught falsely, minimizing, and delaying reports of financial incidents, and intentionally deleting self-investigation data during the Financial Supervisory Service's inspection. The Financial Supervisory Service noted that the Industrial Bank of Korea had recognized multiple instances of improper loans and kickbacks involving several branches and employees after receiving a tip last August, but did not report it to the Financial Supervisory Service until December.
As of the end of February at the Industrial Bank of Korea, the outstanding balance of improper loans was 53.5 billion won, of which 17.8% or 9.5 billion won had deteriorated. Lee Se-hoon, the chief deputy of the Financial Supervisory Service, noted during a briefing, "It is expected that the asset deterioration will worsen as it will become more difficult to roll over funds in the future."
Similar improper loan cases have been detected at Bithumb, a major virtual asset exchange, and NongHyup. According to the Financial Supervisory Service, Bithumb either self-approved the provision of luxury housing for four current and former executives, where the rental deposit amounted to 11.6 billion won, or was caught paying the remaining balance for a residential property that was disguised as a rental.
At NongHyup, from January 2020 for five years, a legal office manager identified as B, who had been involved in cooperative business for over 10 years, colluded with cooperative employees to exploit the lack of reporting obligations for less than 30-unit sales contracts before construction and executed 392 improper loans worth 108.3 billion won by altering sales contracts and other documents. The Financial Supervisory Service criticized that "NongHyup overlooked numerous irregularities in the sales contracts and registration books during loan screening."
There was also a case where an employee of a savings bank improperly handled project financing loans valued at 2.65 billion won and received 21.4 million won in bribes. Additionally, it was discovered that the head of the investment department at a specialized financial company established three corporations under the names of relatives to evade regulatory constraints and registered themselves as an in-house director of the corporations, executing improper loans worth 12.1 billion won across 25 cases.