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Police raid Woori Bank over illegal lending charges

The National Police Agency yesterday raided the headquarters of Woori Bank, the country’s second-largest lender, in central Seoul, to seize documents concerning allegations of an illegal lending practice to support a construction project.

The special investigative division of the police searched the building yesterday morning for three hours. They secured documents related to an allegation that the bank gave out illegal loans to a resort-developing company in return for bribes while building a resort in Pocheon, Gyeonggi from 2006-8.

Police investigators are currently analyzing the documents they have seized from the bank’s related departments, such as investment banking and risk management, to verify whether or not loans given at the time were legal or illegal.

The bank is suspected of granting around 135 billion won ($119 million) in project financing loans to the company, whose name has been withheld.

After securing testimony that an executive of the resort-developing company tried to lobby them for illegal loans, police began tracking the bank accounts of two managerial-level officials from Woori who were in charge of screening and granting loans at the time. The two officials - one former and current employee - are currently under police investigation.

“We’re in the early stage of the investigation so we have only secured a statement that an executive of the resort-developing company tried to lobby bank officials for project-financing loans,” said a police official.

“Other than that, there are no secured details.”

An official from Woori Bank said that it “believes the procedure of granting the loan was done correctly then” and that it “perceives the alleged case to be one of personal corruption.”

The last time police officials raided the Woori Bank headquarters was in July 2010. At that time, bank officials were suspected to have received personal bribes in return for giving out illegal project financing loans for construction work on the Yangjae-dong freight terminal.

By Lee Eun-joo [angie@joongang.co.kr]