KT unit’s salesman in giant fake loan scandal

An employee of KT ENS, a subsidiary of the nation’s second-largest mobile carrier, is under police investigation on allegations he stole 280 billion won ($259.8 million) in loans issued in a shady manner from more than 10 financial companies.

According to the Financial Supervisory Service and the police yesterday, the KT ENS employee, surnamed Kim, embezzled the 280 billion won in loans issued to a company that was set up by the KT unit’s contractors.

The company was created in order to cash accounts receivable bonds.

When the contractors supplied telecommunications equipment to KT ENS, the company issued the bonds as payment to their suppliers. The company used the bonds as collateral to get loans from financial companies, the watchdog said.

Kim allegedly issued fake bonds for products the company bought from one contractor from May 2008 through last month and had the company take out loans for about 100 times the amount from major financial institutions like Hana Bank, Nonghyup Bank and Kookmin Bank.

About 200 billion won in loans were issued in this way.

Another 80 billion won in loans were issued by 10 credit companies.

The FSS discovered the scam during an inspection of a local credit company.

The financial authority believes Kim conspired with several employees of one of the contractors of KT ENS.

An employee of the contractor took some of the loans, the FSS found.

“Some of documents of the contractor have been manipulated,” said an FSS official.

But the authority said it will take some time to confirm how much of the money has been stolen.

The suspect, Kim, was known as a veteran salesman at KT ENS who enjoyed a good reputation in the company and the industry.

BY SONG SU-HYUN [ssh@joongang.co.kr]