Woori Bank provided improper loans totaling 35 billion won ($25.6 million) to relatives and associates of Sohn Tae-seung, the former chairman of Woori Financial Group, according to the Financial Supervisory Service (FSS), Sunday.
An FSS investigation found that Woori Bank issued 42 loans totaling 61.6 billion won to companies connected to Sohn’s relatives between April 2020 and January 2023.
Of these, 35 billion won were deemed improper due to non-compliance with criteria and procedures during the loan review and management process.
Before Sohn took over the group, loans offered to his relatives totaled only 500 million won.
Sohn served as the chairman of Woori Financial Group from December 2018 until March last year.
The FSS reported that, as of July 19, 19 of the 42 loans, amounting to 26.9 billion won, had either defaulted or become delinquent. This suggests that more than half of the loans were improperly issued and resulted in financial losses.
For example, a loan was issued using real estate as collateral, 홀짝게임 even though it was already fully pledged to higher-priority loans, leaving no available value. Additionally, loans that required headquarter’s approval were improperly processed at the branch level without authorization.
Many of these loans were managed by an executive who was the head of the bank’s financial center in Seolleung, Seoul. He was dismissed from his position in April.
The FSS stated that it will proceed with disciplinary action and intends to separately notify investigative agencies of any legal violations.
“We are taking this matter very seriously, as internal controls at both the holding company and the bank failed to function properly under the current system, where authority is concentrated in the chairman of the holding company,” an FSS official said.
Woori is once again facing criticism for its inadequate internal controls. A spokesperson said that the lender “will thoroughly improve its procedures and fully cooperate with investigations by regulatory and law enforcement authorities.”