Panel starts probe on savings banks, watchdogs

The special parliamentary committee on the savings banks corruption scandal began its investigation on Monday, but is still mired in conflict over witness selection, the key factor in the upcoming public hearing.

Members of the committee visited the central headquarters of Busan Savings Bank on Monday morning to meet with victim representatives and to audit the related documents.

“Financial authorities have neglected their supervisory duties,” said Kim Ok-ju, the chairperson of the savings banks victim committee, who demanded a full compensation for their deposit losses.

The committee then moved to the Busan Regional Tax Office in the afternoon to screen tax audit documents related to Busan and its affiliated savings banks.

The investigation is to continue on Tuesday in Mokpo, where the headquarters of Bohae Savings Bank is located, officials said.

There, the committee will investigate whether the Bohae Savings Bank formed illicit ties with financial authorities in order to dodge audits.

After the tour, the panel will turn its eye to central organizations such as the Board of Audit and Inspection, the Financial Supervisory Service and the Supreme Prosecutor’s Office with focus on any possible investigational errors.

Despite the tight investigation schedule, however, the parties have failed to reach an agreement on the selection of witnesses to be called to the hearing in the National Assembly.

The ruling Grand National Party urged the committee to abide by the original timeline in order not to delay the investigation any further.

The main opposition Democratic Party, however, criticized the ruling party for rejecting the selection of several key witnesses, thus clouding the savings banks scandal.

“The parliamentary investigation may never become fair unless the witness list is clear of all doubts,” said DP lawmaker Ooh Che-chang.

Other extended allegations have also been raised during the investigation processes.

“The Camko Bank, established by Busan Savings Bank in Cambodia, has sent out a total of 21 billion won ($19.9 million) to Korean and U.S. banks,” said Rep. Lee Doo-ah of the GNP.

“The corresponding money is highly likely to be a secret illicit fund.”

DP lawmaker Rep. Park Sun-sook claimed that the prosecution deliberately neglected the investigation over the corruption of Busan Savings Bank directors and stockholders back in 2008.

By Bae Hyun-jung (tellme@heraldcorp.com)