Daegu Bank raided over illicit hiring practices

The prosecution raided Daegu Bank on Friday over an allegation that it engaged in illicit hiring practices in 2016 by favoring applicants with ties to the bank’s executives.

The regional bank headquartered in Daegu, North Gyeongsang, is the latest target of a recruiting scandal rippling through the banking industry. Prosecutors launched search and seizure operations on three banks - KEB Hana, Busan and Kwangju - on Thursday for the same allegations, while KB Kookmin Bank was raided on Tuesday.

Of the banks, KEB Hana Bank has the highest number of alleged cases, according to multiple media reports.

Investigators from the Seoul Western District Prosecutors’ Office were sent to KEB Hana Bank’s headquarters in central Seoul to search the premises and confiscate evidence for 10 hours, the office said.

The major lender is suspected of modifying scores for certain applicants who are either related to or acquaintances of its executives, allowing them to pass the recruitment tests or interviews to get jobs at the bank.

Prosecutors suspect that KEB Hana kept a so-called “VIP list” of applicants who had ties to executives and took them into account for special treatment over the course of the recruitment process.

The investigators also searched the office of the bank’s CEO Ham Young-joo.

In a separate case, KEB Hana allegedly tampered with interview scores in order to hire graduates from three of the country’s most prestigious universities: Seoul National University, Yonsei University and Korea University.

KB Kookmin Bank is accused of offering preferential treatment to the great-granddaughter of its holding group chairman, Yoon Jong-kyoo.

The prosecution launched the probe into five major banks over suspected hiring irregularities after the Financial Supervisory Service (FSS), the country’s financial watchdog, requested a formal investigation based on its own inquiries in December and January that found 22 potential cases.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]