Korea Savings Bank chair next target in scandal

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Korea Savings Bank chair next target in scandal

While prosecutors have widened their probe into the latest savings banks scandal, another bank executive of one of the four suspended savings banks was found to be allegedly involved in a string of financial irregularities.

On Wednesday, prosecutors obtained evidence that Yun Hyun-soo, the 59-year-old chairman of Korea Savings Bank, allegedly received 30 billion won ($26 million) in illegal loans from Gyounggi Savings Bank, a subsidiary of Korea Savings Bank, in April, 2008.

Prosecutors raided key branches of the Korea Savings Bank on the same day to find out more about the illegal loan and whether any political figures were involved in the procedure.

Chairman Yun of Korea Savings Bank is widely known as an economics advisor for former President Kim Dae-jung. He even escorted Kim in 1998 during his visit to the United States for a state summit. Ever since, he is known to have established close ties with officials from the Kim Dae-jung government.

Prosecutors have also launched an investigation yesterday to uncover details about the 200 billion won that Korea Savings Bank took out over the period of three years beginning in 2005 as illegal loans given to support a resort construction project led by Taihan Electric Wire in Cebu, Philippines.

The investigation is aimed at finding out whether Yun is involved in a special relationship with Taihan Electric Wire, as they have also obtained evidence that Gyounggi Savings Bank gave a separate illegal loan of 67.5 billion won to Lim Jong-wook, former vice chairman of Taihan Electric Wire, using a borrowed name.

Also, according to state investigators, the Seoul Central District Court has obtained a statement from the head of Kyung An Cable, a small-sized electronic firm, earlier this year that “it has been recorded that the company received 30 billion won worth of loans from Gyounggi Savings Bank in 2008 but actually, the loan was illegally taken out by Korea Savings Bank under the name of Kyung An Cable.”

The latest findings on Chairman Yun’s alleged involvement in possible financial corruption cases come several days after Mirae Savings Bank Chairman Kim Chan-kyong was arrested this week on charges of embezzlement and breach of trust.

Kim was caught last week at a port in Geungpyeong in Hwaseong, Gyeonggi, trying to flee into China to avoid investigation last week and is suspected of appropriating 200 billion won of company funds.

He is also suspected of giving 300 million won to a group of Korean gang members for helping him plan his secret passage to China. The Korean gang is known to be linked to a Chinese gang.
By Park Jin-seok, Lee Eun-joo[angie@joongang.co.kr]
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