Financial Authorities Suspend ES Savings Bank's 'Securities Collateral Loan Business' for 6 Months...Impose 9.1 Billion KRW Fine

Former CEO Recommended for Dismissal... Executives and Team Leaders Suspended for 3 Months and Salary Reduced for 3 Months Each

[Asia Economy Reporter Kwangho Lee] Financial authorities have imposed a six-month suspension on ES Savings Bank (formerly Live Savings Bank) from conducting new securities-backed loan operations.

On the 27th, according to financial authorities, the Financial Supervisory Service conducted three inspections of ES Savings Bank last year. As a result, numerous illegal activities were identified during the process of focusing on securities-backed loans linked to convertible bonds (CB) and bonds with warrants (BW) after acquiring the savings bank. Consequently, this measure was decided. The suspension period is from the 28th until July 27.

Additionally, a fine of 9.11 billion KRW and a surcharge of 74 million KRW were imposed. The former CEO received a dismissal recommendation, the former auditor and former head of headquarters were suspended for three months, and five employees including the former team leader were subjected to a three-month pay cut.

A financial authority official explained, "We decided on partial suspension of operations and other measures to raise awareness against illegal acts by major shareholders and management that undermine the sound market order of the savings bank industry."

This partial suspension applies only to new securities-backed loan operations among credit businesses. Other credit operations such as real estate-backed loans, small credit loans, and deposit-taking operations like savings and time deposits will continue to operate normally.

As of the end of September last year, ES Savings Bank’s total capital ratio based on the Bank for International Settlements (BIS) standards was 15.7%, indicating a relatively stable condition.

A financial authority official stated, "We will ensure that securities-backed loans by savings banks, which can be used as a source of funds for unfair capital market trading, are not excessively handled. We will also continue to respond strictly to illegal acts by major shareholders who acquired the savings bank through evasive methods to avoid stock acquisition approval."

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