FSC sucked into savings bank scandal

Senior official at financial regulator accused of influence peddling on behalf of Solomon


Prosecutors launched a full investigation into financial authorities in relation to corruption at debt-saddled savings banks.

The joint investigation looking into savings banks’ corruptions, carried out by prosecutors and officials from finance-related government organizations, investigated a senior official at the Financial Services Commission for two days starting Wednesday on bribery charges.

The official is suspected to have received tens of millions of won from the chief executive of Solomon Savings Bank in return for keeping the bank off the September 2011 list of savings facing suspension. The official is also thought to have pressured the Financial Supervisory Service, an executive arm of the FSC which has members on the joint investigation team, after receiving the bribe.

It is the first time the investigation team summoned and investigated an FSC official regarding the savings bank scandal. Solomon chief Lim Suk is known to have confessed to the team that he handed money to an FSC official just before the September 2011 list was announced. 

Solomon was suspended after being included in the May list of savings banks to be suspended. This was the government’s third round of savings-bank restructuring. The bank was expected to be included in the second-round list in September but was not.

A spokesman for the FSC declined to comment, saying that he “does not know the details about the investigation and is merely waiting for the results.”

The joint investigation team is thought to be planning to seek an arrest warrant for the FSC official. The team is also known to have questioned the official on the policymaking process regarding savings bank mergers in 2008, when the official was working in the Blue House.

The savings bank case is looking like a typical influence-peddling gate as more of President Lee Myung-bak’s close aides turn out to be involved. President Lee Myung-bak’s elder brother former lawmaker Lee Sang-deuk was detained Wednesday for receiving bribes from Lim Suk, the Solomon chief, and prosecutors are known to have started investigations on Kim Hee-jung, private secretary of President Lee, who is also suspected to received about 100 million won ($86,700) from Lim.

Prosecutors are expected to further summon a string of financial officials including high-level officials at the FSC and FSS regarding the savings bank case, according to reports.

By Park Min-young  (claire@heraldcorp.com)