[2020 National Audit] Yoon Jong-won, CEO of Industrial Bank of Korea, Breaks a Sweat Amidst Flood of Criticism in Debut Appearance

Yoon Jong-won, Bank President, on Discovery Fund: "Will Take Appropriate Responsibility for the Outcome"

[Image source=Yonhap News]

[Asia Economy Reporter Park Sun-mi] The first parliamentary audit since Yoon Jong-won took office as president of IBK Industrial Bank of Korea (IBK) was far from smooth. He faced fierce criticism from lawmakers over the Discovery Fund scandal, various employee misconducts, and the sale of 'kkyeokgi' products.

At the National Assembly's Political Affairs Committee audit held on the 16th in Yeouido, lawmaker Kang Min-guk of the People Power Party questioned President Yoon about his responsibility for the Discovery Fund incident. Kang pointed out, "IBK, a state-run bank, deceived customers by selling the Discovery Fund as safe. It failed in its role as a state bank." In response, President Yoon defended, saying, "We did not deceive customers," but Kang countered by presenting cases of small business owners harmed by the Discovery Fund, stating, "Bank employees emphasized the product's safety when selling it. It is indeed a case of deception."

President Yoon said, "There were some cases of incomplete sales during the selling process," adding, "I personally met customers who experienced incomplete sales, and after undergoing an investigation by the Financial Supervisory Service, we are awaiting the inspection results. We will take appropriate responsibility based on the outcome."

Frequent Financial Accidents Occur, Internal Control System Deemed Inadequate

There were also criticisms that IBK's internal control system was insufficient regarding the occurrence of financial accidents.

Lee Jung-moon, a lawmaker from the Democratic Party of Korea, said, "In the banking sector, financial accident losses caused by employees embezzling customers' money to invest in stocks or virtual currencies have reached 480 billion won over the past five years," adding, "This indicates that internal controls are not functioning properly. IBK also experienced financial accidents amounting to 133.7 billion won from 2016 to 2020. However, the number of cases detected through the bank's internal system is low. This points to problems with the inadequate internal audit system."

Yoon Doo-hyun, a lawmaker from the People Power Party, also criticized the 'self real estate loan' incident involving an IBK employee, saying, "It is like 'entrusting a fish shop to a cat.' A state bank employee took out a self-loan and made investments completely contrary to the current government's policies. It seems the internal controls are insufficient."

Regarding employee-related financial accidents, President Yoon stated, "The internal control system is being improved. We will make additional efforts."

Criticism on the Role of Supporting Small Business Owners in the COVID-19 Era: "Must Reflect on 'Kkyeokgi' Sales"

Lawmaker Lee Young of the People Power Party urged IBK to better fulfill its role in supporting small business owners struggling due to the COVID-19 crisis and called for measures to address the exclusion of low-credit borrowers.

Lee referred to petitions posted on the Blue House petition board, saying, "There are cases where small business loans have become 'unattainable rice cakes.' The bank needs to establish its own criteria for screening to ensure no one is excluded from support during the COVID-19 crisis. The same screening and execution standards as in the past cannot be applied during this crisis."

Furthermore, Lee urged correction of IBK's practice of bundling other financial products while supporting small business owners, known as 'kkyeokgi,' which was the most frequently conducted. In response, President Yoon claimed, "It is not 'kkyeokgi,'" explaining, "For one month after loan disbursement, signing up for products that would qualify as 'kkyeokgi' is blocked in the system. There would have been no coercive 'kkyeokgi' by employees."

Meanwhile, in front of the National Assembly building in Yeouido, Seoul, members of the IBK Discovery Fund Fraud Victims' Countermeasure Committee held a press conference titled 'Condemnation of IBK President Yoon Jong-won as a National Assembly Audit Witness and Call for Resolution.' They demanded that IBK immediately declare all contracts with Discovery Fund victims null and void and compensate them.

This content was produced with the assistance of AI translation services.