{"id":2206126,"date":"2024-08-12T18:04:19","date_gmt":"2024-08-12T09:04:19","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206126"},"modified":"2024-08-13T19:10:48","modified_gmt":"2024-08-13T10:10:48","slug":"loan-scandal-at-woori-bank-highlights-systemic-issues-in-rok-financial-sector","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/08\/loan-scandal-at-woori-bank-highlights-systemic-issues-in-rok-financial-sector\/","title":{"rendered":"Loan scandal at Woori Bank highlights systemic issues in ROK financial sector"},"content":{"rendered":"
The chairman of Woori Financial Group Inc. publicly <\/span>apologized<\/span><\/a> on Monday for the improper extension of loans totaling about $45 million (61.6 billion won) by Woori Bank to relatives of former chairman Son Tae-seung.<\/span><\/p>\n These loans, issued from <\/span>April 2020 to Jan. 2024<\/span><\/a>, were found to have bypassed standard screening processes. Of particular concern was $25.5 million (35 billion won) in loans granted without proper documentation, collateral verification or adherence to internal review processes\u200b, reflecting severe governance lapses within the institution.<\/span><\/p>\n But while the current controversy has focused on Woori Bank, the problems that the incident have highlighted are systemic in South Korea\u2019s financial sector, where the concentration of power and weak internal controls have repeatedly raised concern and undermined investor confidence.<\/span><\/p>\n WHAT HAPPENED<\/b><\/p>\n Prior to Son taking over as head of Woori Financial Group in 2020, loans to his relatives amounted to only $3.3 million (4.5 billion won).<\/span><\/p>\n But this figure increased significantly during his time in office, raising concerns about potential conflicts of interest and the integrity of governance practices within the bank.<\/span><\/p>\n This was not the first time Woori Bank had faced issues related to governance and internal control failures. The institution has a history of such incidents, which have repeatedly exposed weaknesses in its oversight mechanisms.<\/span><\/p>\n For instance, the bank was embroiled in a major embezzlement case in 2022 where an employee exploited gaps in the bank\u2019s oversight mechanisms to misappropriate nearly $510.6 million (<\/span>700 billion won<\/span><\/a>) over several years.<\/span><\/p>\n