[2020 National Audit] Yoon Jong-won, CEO of Industrial Bank of Korea, "Self-loans Should Never Happen"

[Image source=Yonhap News]

[Asia Economy Reporter Kangwook Cho] Yoon Jong-won, President of IBK Industrial Bank of Korea, said on the 16th regarding the controversy over an employee’s 7.6 billion KRW ‘self-loan,’ “An incident that should not have happened occurred,” adding, “All executives and employees are taking this very seriously.”

At the National Assembly’s National Policy Committee audit held that day, Yoon responded to the question from Yoon Doo-hyun, a member of the People Power Party, who asked, “How was it possible that a national policy bank employee’s 7.6 billion KRW family loan was not filtered by the internal system?”

Assemblyman Yoon pointed out, “Most banks have management regulations that prohibit loans to employees’ family members,” adding, “It appears that IBK and KDB Industrial Bank do not have such regulations. Even banks smaller than IBK or KDB have such rules, and the fact that this has never happened before indicates a significant moral hazard as national policy banks.”

He also said, “An IBK employee made investments opposing the Moon Jae-in administration’s real estate policies through self-loans,” and asked, “I am curious about the background of how such illegal loans were obtained for these investments.” He further inquired, “Is there any negative evaluation of the current government’s real estate policy from IBK’s Management Research Institute?”

In response, President Yoon said, “I don’t think we have investigated such matters,” but added, “However, I will check if there are any reports and submit them if they exist.”

According to a document titled ‘Investigation on the Appropriateness of Loan Handling’ provided by IBK to Assemblyman Yoon, IBK Deputy General Manager A executed real estate secured loans totaling 7.57 billion KRW from March 2016 to the first half of this year to five corporations and individual business owners where his wife and mother were CEOs. Subsequently, he purchased a total of 29 properties, including apartments and officetels in Hwaseong, Gyeonggi Province, and row houses in Bucheon, reportedly earning tens of billions of KRW in valuation gains.

In response, IBK took the highest disciplinary action of ‘dismissal with disciplinary measures’ against the employee on the 3rd of last month and filed a criminal complaint on charges including fraud. The full recovery of the loan amount is also underway. Additionally, IBK established internal regulations and a computerized system that fundamentally prohibit loans to employees and their spouses’ relatives and plans to conduct regular monitoring related to this.

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