The Industrial Bank of Korea is unable to exclude employees involved in an improper loan amounting to 882 million won from their positions. Since the Financial Supervisory Service (FSS) has not completed its inspection, the list of individuals subject to sanctions has not been finalized, and it is challenging to deduce who is involved beyond the cases disclosed by the FSS.
The FSS is expected to send an inspection report that clearly identifies the illegal and improper behaviors of the institutions and employees subject to sanctions before personnel measures, such as a suspension, can be implemented. The FSS has stated it will send the inspection report to the Industrial Bank of Korea as soon as possible.
According to the financial sector on the 28th, the FSS announced that a total of 20 individuals are implicated in the improper loans related to the Industrial Bank of Korea, of which only 6 employees have been excluded from their duties and placed on standby following the bank's prior internal investigation. This includes the wife of former employee A, who is a key figure in the improper loan incident, and employees who directed the concealment of the incident.
Previously, on the 25th, the FSS released inspection cases related to improper transactions involving stakeholders, citing the case of improper loans at the Industrial Bank of Korea as an example. The FSS revealed it discovered that A, a former employee of the Industrial Bank of Korea, colluded with his wife, an active auditor, and colleagues from the same batch to obtain improper loans amounting to 78.5 billion won over seven years. The FSS further explained that even though the Industrial Bank of Korea conducted its own investigation following relevant reports received last August, it concealed and minimized the findings without promptly reporting them to the FSS. In January of this year, during the inspection process, employees deleted files and internal messages under the direction of a department head to obstruct the examination.
On the following day, the 26th, the Industrial Bank of Korea announced a renewal plan stating that it would impose strict penalties on the employees involved in the incident, but it is in a position where immediate personnel actions are impossible as it cannot ascertain who was implicated in the improper loans. A representative from the Industrial Bank of Korea noted, "It is difficult to identify the remaining individuals involved in the improper loans, apart from those already suspended from work," adding that it is expected that personnel actions will be feasible once the FSS completes its investigation and provides the list of those subject to sanctions.
Until the investigation is concluded, there is no reasonable basis for any personnel measures. The FSS is still conducting an inspection of the Industrial Bank of Korea. Since the inspection has not yet been completed, both the amount of the incident and the individuals subject to sanctions have not been finalized. Only after the FSS completes its investigation can the Industrial Bank of Korea take the necessary personnel measures.
The FSS plans to send the inspection report to the Industrial Bank of Korea by April. A representative from the FSS stated, "We plan to send the inspection report quickly next month," adding that it may sequentially dispatch reports for certain individual improper loans identified in the completed inspections. The inspection report will specify the violations detected during the on-site inspection by the FSS and is a procedure for confirming the facts with the institutions and employees subject to sanctions. It is expected that the list of individuals implicated in the improper loans will be included in the inspection report.
Once the FSS sends the inspection report, the Industrial Bank of Korea must submit a response based on the issues identified in the inspection within 2 to 3 weeks. Subsequently, the FSS will prepare a sanction proposal, which will be finalized through deliberations by the Sanction Review Committee, the Securities and Futures Commission, and the Financial Services Commission.