A director of the Jongno East Saemaul Geumgo in Jongno-gu, Seoul, was dismissed earlier this year for sexual harassment and bullying in the workplace, as well as personal misuse of the Geumgo's budget. The director charged personal meal expenses, family living expenses, and travel costs to a corporate card and then submitted false receipts to process the card payments as part of the Geumgo's budget.
It was also discovered that the director used real estate and vehicles owned by the Geumgo for personal use, lent money to other Geumgo executives and members, and received interest rates exceeding the legal maximum.
Earlier this year, it was revealed that five employees at Daesung Saemaul Geumgo in Dalseo-gu, Daegu, had approved preferential loans. They appraised customers' real estate at prices higher than normal, provided loans exceeding the loan limits, and arbitrarily applied preferential interest rates to lower the loan rates. They exercised undue influence by instructing other employees of the Geumgo to perform improper tasks to grant these preferential loans.
This year, various misconducts, including embezzlement, breach of trust, preferential loans, and personal misuse of the Geumgo's budget, are occurring at Saemaul Geumgos across the country. In April 2024, concerns were raised about internal control gaps at Saemaul Geumgos due to allegations of fraudulent loan practices involving Democratic Party of Korea member Yang Moon-seok, but improvements have still not been made.
On the 12th, ChosunBiz confirmed that five Geumgos, including Daesung Saemaul Geumgo, were sanctioned for providing preferential treatment to specific individuals during the period from January to August 2025 (as of the announcement date). Alchan Saemaul Geumgo in Gimcheon provided preferential loans to interested parties, and Geumam Saemaul Geumgo in Jeonju was found to have unjustly paid commissions to specific corporations.
There were also six Geumgos that were sanctioned for exceeding the loan limits for the same individuals. The Saemaul Geumgo Act stipulates that loans to specific individuals, which concentrate deposits, cannot exceed 20% of the institution's capital. Daesung Saemaul Geumgo's loans exceeding this limit amounted to 129.6% of its capital, exceeding the legal standard by six times.
There was also an incident involving employees of a Saemaul Geumgo engaged in criminal activities. An executive at Jongno Sungin Saemaul Geumgo in Jongno-gu, Seoul, received money for facilitating private lending and was found to be actively involved in illegal money laundering activities last April. Geumam Saemaul Geumgo in Jeonju employed an individual fraudulently to pay a salary, while an employee at Anyang Nambu Saemaul Geumgo in Gyeonggi withdrew and deposited cash several times into another person's account to avoid paying gift tax. There were five incidents of sexual harassment and bullying in the workplace, and one case of embezzlement of member loan deposits.
Four Geumgos improperly handled 'construction progress loans', which provide funds in stages according to the progress of construction, and three Geumgos improperly processed loans for corporate operating expenses. Three Geumgos were found to have engaged in resource-less transactions, where funds were manipulated to appear to move electronically without actual cash flow. A typical case of resource-less transactions involves manipulating records to show a repayment of loans that were never repaid, immediately followed by issuing a loan of the same amount.
The most common case of internal financial transactions among Geumgo employees and members was found in 14 instances. Saemaul Geumgos prohibit employees from engaging in private financial transactions with other employees or members. Such transactions can create conflicts of interest, damaging the impartiality of duties like lending and personnel matters. At ChuBu Saemaul Geumgo in Geumsan, Chungcheongnam-do, when a borrower fell into arrears, three employees pooled money from a club account to lend to the borrower to help pay off the debt. This was interpreted as a workaround to temporarily resolve the arrears and maintain the soundness of the Geumgo.
As these incidents occur every year, there are growing concerns that the internal controls of the Saemaul Geumgo Federation are insufficient to manage and supervise the 3,264 branch offices and main offices nationwide. Although the Saemaul Geumgo implemented an internal control work guide in October 2024, incidents and accidents persist. Some argue that the management and supervision of Saemaul Geumgos should be transferred from the Ministry of the Interior and Safety to the Financial Services Commission and Financial Supervisory Service.