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RETAIL BANKING | Cesar Tordesillas, Korea
Published: 23 May 12
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Hana raided over savings bank scandal

The main office of Hana Capital in southern Seoul have been raided by prosecutors for its role in the Mirae Savings Bank scandal.

 

They wanted to check out out whether former Hana Financial Group Chairman Kim Seung-yu had pressured the subsidiary to participate in a capital increase for Mirae Savings Bank.

The prosecution said it may summon the former chairman, and Kim Jong-jun, CEO of Hana Bank, for questioning over their roles in a 14.5 billion won investment by Hana Capital into Mirae in September last year.

The two were suspected of approving Mirae Chairman Kim Chan-kyung’s request, though the company was not qualified to receive any money. The prosecution declined to reveal details of the ongoing investigation. The Mirae chairman, now under arrest, told prosecutors about the former Hana chairman’s involvement.

The money Hana Capital invested in Mirae was backed by five paintings owned by the company, stocks of Chairman Kim Chan-kyung, his apartment in Apgujeong-dong in southern Seoul and the main office of Mirae in Secho-dong, southern Seoul as collateral.

However, experts say the real estate has no real value as they have already been seized by other creditors. They also argue that it is not common practice for paintings to be used as collateral because their value changes so quickly and erratically.

Experts say the scandal will negatively affect the group if it turns out that Kim Seung-yu was involved in bribery. Foreign investors have about a 62 percent stake in Hana Financial, and the corruption scandal may see them sell their stocks due to business uncertainties caused by the fallout, according to observers.

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Tags: Korea savings bank scandal, Hana Financial, bank raid, capital increase, Mirae Savings Bank

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