Prosecutors get involved in KB computer case

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Prosecutors get involved in KB computer case

Prosecutors yesterday raided the computer system center of KB Kookmin Bank to seize data and documents to investigate possible irregularities surrounding the bank’s switch of the system from IBM to Unix, which touched off a bitter boardroom feud.

The feud has already led to the resignation of Kookmin Bank CEO Lee Kun-ho following a reprimand by the Financial Supervisory Service (FSS). KB Financial Group Chairman Lim Young-rok’s fate is unclear after he was suspended for three months by the Financial Services Commission (FSC).

The Supreme Prosecutors’ Office said it dispatched a group of investigative officers to the system center of the bank in Yeomchang-dong, western Seoul, and secured emails by executives and employees including those of Kim Jae-yeol, the chief information officer of KB Financial Group, who was embroiled in the conflict over the switch in computer systems. The group is now being blamed for abusing its power over its bank subsidiary.

Kim allegedly concealed problems with the Unix system to ensure it was used, the FSS found in an investigation between May and June.

Prosecutors are focusing on any illegal actions or irregularities including manipulation of reports to the bank’s board. They will also look into whether the system change was done through a legal and fair process.

As soon as they finish analyzing the seized emails and data, the prosecutors will summon Kim and other executives for questioning on the allegations by the FSS.

Including Kim, the FSS accused four KB executives with prosecutors on Monday. Group Chairman Lim Young-rok, who was slapped with a three-month suspension from work, has also been accused.

On Aug. 26, Kookmin Bank’s top management sued Kim and two others for interrupting the system change project.

The Financial Consumer Agency decided to sue separately the group chairman and former Kookmin president Lee Kun-ho for denting consumers’ trust and causing losses for the bank.

Based on its investigation, the FSS recommended reprimands that can bar Lim and Lee from taking jobs in the financial sector for three to five years on Sept. 4. Lee stepped down as CEO immediately, but Lim insisted the punishment was unfair.

However, pressures on him to resign from the group’s board of directors and the government are growing. The board will hold a meeting today to discuss the possible dismissal of Lim.


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