Chief of suspended savings bank found dead

Joint investigation team raids headquarters of seven savings banks


The chief of one of the seven local savings banks that were suspended last week due to capital shortages was found dead Friday in an apparent suicide, according to Seoul police.

Jeong Gu-haeng, the 50-year-old head of Jeil 2 Savings Bank headquartered in central Seoul, was found lying dead on the street in front of the bank at around 12:05 p.m. apparently after having jumped from the roof, the police said.

The incident took place as investigators looking into corruption allegations involving savings banks raided his bank. They also searched the offices of the other six savings banks and homes of their executives and major shareholders.

“He appears to have hurled himself from the rooftop of the (six-storied) building while the prosecutorial search was taking place. We are trying to verify the exact situation,” a police official said, declining to be identified.

“It is sad that this took place, though he had been very cooperative with the investigation. He might have felt much pressure as his bank was suspended and facing a prosecutorial inquiry.”

After his death, a hand-written memo was found. In it, he said he would take all responsibility for what went wrong and expressed apologetic feelings toward his staff and clients.

Last Sunday, the Financial Services Commission suspended the operations of seven mutual savings banks troubled with capital shortages, in addition to the nine suspended and shut down earlier this year.

The suspension was part of its efforts to weed out unviable banks that failed to meet regulatory capital requirements. It came as their Bank for International Settlements ratio ― the capital adequacy ratio ― was below 5 percent. Savings banks are required to keep their BIS ratio at 5 percent or above.

The joint investigation team including related state regulatory agencies searched some 20 places including the head offices of the seven distressed banks to find evidence on possible illicit lending, bribery, financial irregularities and other corruptive acts.

From the raids that began at 10 a.m., the team confiscated a variety of accounting documents, financial records and computer hard drives.

“We are focusing on securing records on cases of exceeding their lending limits, bad loans and other cases that took place in the banks in point,” said an investigator, declining to be named.

“For now, we are searching the headquarters and homes of their management. If need be, we will also search their branch offices. There is no arrest warrants yet we have received apart from this raid.”

After analyzing what it has confiscated, the investigation team plans to query key bank officials alleged to have been involved in any corruption allegations, officials said.

The team has reportedly barred some of the key bank officials from leaving the country with support from the Justice Ministry.

The joint probe team consists of some 80 people from the prosecution, police, the National Tax Service and the Korea Deposit Insurance Corp.

By Song Sang-ho (sshluck@heraldcorp.com)