The state financial authorities said Sunday they plan to take a stronger action against violation of real-name financial transaction law in a bid to enhance market transparency.
The Financial Services Commission and Financial Supervisory Service said they plan to impose heavier fines on violators and also take a stronger measure against the usage of borrowed-name accounts by business tycoons.
The move came amid rising criticism from the public that the existing rules are perfunctory due to the lax punishment on violators, sparking concerns for moral laxity in the local financial market.
While the current law allows financial authorities to impose fines of up to 5 million won ($4,708) on such violators, the average actual fines levied were around 1 million won to 2 million won.
"We agree that the actual penalty given to offenders is too lenient, though the law has the ceiling set at 5 million won," a financial official said. "We plan to levy heavier burden (on the lawbreakers)."
Under the financial law enacted in 1993, it is illegal to use borrowed names for financial transactions. But many family-owned conglomerates, known here as chaebol, have been accused of having such fake accounts to unlawfully move corporate funds and stash secret money.
Authorities added they will take a closer look at habitual violators such as Woori Bank and Hanwha Securities Co., and take heavy disciplinary actions against them when they fail to make efforts to abide by the law.
In 2012, the number of real-name transaction law violations came to 53 cases for Woori Bank, hovering far above the 31 tallied for Standard Chartered Bank Korea and 29 for Shinhan Bank.
Hanwha Securities held a comparable figure of 21 in the cited period, far above one to four cases held by other local brokerage houses.
Meanwhile, heads of several conglomerates in South Korea, including CJ Group and Hanwha Group, have been facing prosecution probes for allegedly possessing slush funds using borrowed names. (Yonhap News)
