, Korea

Korean government investigating Big Four financial groups

Probe focusing on allegations of business irregularities. The Financial Supervisory Service is undertaking a simultaneous and extraordinary probe of Hana Financial, KB Financial, Shinhan Financial and Woori Financial. Media reports said the main targets of the regulators include former Hana Financial Group chairman Kim Seung-yu and former KB Financial Group chairman Euh Yoon-dae. Kim is suspected of purchasing thousands of art pieces for irregular purposes during his term as group chief and receiving US$3.2 million in incentives from the financial group when he left his post. Hana Financial has denied the allegations. Kim has also been accused of irregularities during his involvement in the group's takeover of Korea Exchange Bank. KB Kookmin Bank, the flagship unit of KB Financial, is being investigated for an alleged slush fund scandal. The bank’s Tokyo branch allegedly has secret funds for the bank's management. Sources said FSS has uncovered traces of evidence the Tokyo branch manager pocketed large sums of fees while approving off the books loans. FSS discovered that a portion of the commissions, allegedly worth over US$1.87 million, might have been transferred to a domestic account. Investigations seek to determine whether the money was sent to the bank’s management. Shinhan Bank has been under investigation over allegations it might have illicitly accessed lawmakers' bank accounts and private information. Woori Bank allegedly conducted sales of financial products without fully explaining the risks to consumers.

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