Prosecution speeds up banks probe

Ex-FSS governor to be summoned, arrest warrant sought for FIU chief By Bae Hyun-jung


The investigation into the high-profile corruption scandal involving savings banks was picking up pace Tuesday as prosecutors were set to summon former governor of the Financial Supervisory Service Kim Jong-chang for questioning.

The central investigation unit of the Supreme Prosecutors’ Office was expected to interrogate Kim on whether he peddled influence to ease inspections on insolvent mutual savings banks.

Arrested former state auditor Eun Jin-soo allegedly asked Kim to ease the FSS sanctions on Busan Mutual Savings Bank, which is at the center of the corruption scandal.

The FSS and the Korea Deposit Insurance Corp. stopped their joint inspection on companies related to the Busan savings bank for a week in February and April last year.

The prosecution will also question Kim over what led Asia Trust Co., where he had been registered as a board director, to invest in the Busan savings bank.

The prosecution has sought an arrest warrant for Kim Gwang-soo, chief of a state-run anti-money laundering agency under the FSC, who allegedly accepted tens of millions of won in bribes from the Busan bank.

Prosecutors last week grilled the commissioner of the Korea Financial Intelligence Unit, who had served as a senior official of the Financial Services Commission, the supreme financial regulatory agency that controls the FSS.

The prosecution said Tuesday that it indicted the bank’s broker Yoon Yeo-seung on charges of malfeasance and bribery last week.

A number of politicians are known to be implicated in the corruption at savings banks.

District prosecutors’ offices in Busan, Seoul, Gwangju and Chuncheon are simultaneously deepening their probes into the now-suspended Busan, Samhwa, Bohae and Domin savings banks, respectively.

Investors in Samhwa, meanwhile, demanded government compensation for their losses, marking the first civil lawsuit after the savings banks were suspended en masse.

Twenty-two people who bought subordinated bonds issued by Samhwa were set to file a damages suit against the bank and a former FSS official who now serves as a director of the bank.

The SPO’s central investigation unit is expected to accelerate its probe of former and incumbent lawmakers implicated in the savings banks’ case after Cheong Wa Dae on Monday expressed opposition to a legislative move to remove the central unit.

A six-person subpanel under a special parliamentary committee on judicial reform agreed to stick to their legislative plan to abolish the SPO’s elite investigation team last Friday, prompting a strong backlash from the prosecution. The unit’s probes are under direct control of the prosecutor general who is appointed by the president.

Critics of the legislative move, including the presidential office, however, note that the central unit must be retained as no other independent agency can investigate high-profile cases involving senior politicians and top government officials.

By Kim So-hyun (sophie@heraldcorp.com)