"NongHyup Embezzlement Again: Employee Arrested for Tens of Billions in Loans Under Customer Names... Used for Sports Gambling"

Embezzlement in the Past Year
Absence of NH Supervisory System
On-site Audit Conducted at NH Nonghyup Central Branch

[Asia Economy Reporter Jang Sehee] Following embezzlement incidents at Woori Bank, KB Savings Bank, and Saemaeul Geumgo, another case has occurred at Nonghyup, raising growing criticism over inadequate supervision and oversight in the financial sector.

On the 1st, the Gwangjin Police Station in Seoul booked and is investigating Kim, an employee of the Guui Station branch of Seoul Central Nonghyup, on charges of embezzlement for loaning approximately 2 billion KRW under customers' names and diverting the funds. However, the embezzled amount may change later as it is based on Kim’s statement. The police have currently identified the damage amount as 45 million KRW. Kim reportedly embezzled funds over about a year, using the money for gambling such as Sports Toto.

This case came to light when a victim who visited Saemaeul Geumgo confirmed that 45 million KRW had been loaned under their name during the loan process and reported it to the police. Analysis of CCTV footage by the police confirmed that the customer had never visited Nonghyup. Consequently, the police investigated the Nonghyup employees and identified Kim.

Kim is known to have obtained the loan under the customer's name through a "deposit-secured loan." Deposit-secured loans are loans taken out using fixed deposits, savings, or comprehensive housing subscription savings as collateral. The loan limit is within 90% of the collateral deposit balance.

As embezzlement cases continue in the financial sector, calls for stronger internal controls and harsher penalties are growing. According to a recent five-year investigation by the Financial Supervisory Service, 174 employees in banks, insurance, card companies, securities, and savings banks embezzled a total of 109.1826 billion KRW.

Professor Kwak Daekyung of Dongguk University’s Police and Judicial College said, "Due to the economic downturn, people believe they cannot earn large sums through their salary or business, increasing the tendency to seek large profits through criminal means. It is important to minimize systems where decisions are made by individuals alone and to create a structure that enables quick detection through the activation of internal whistleblower systems."

Professor Lee Woonghyuk of Konkuk University’s Department of Police Science stated, "Sometimes external audits fail to detect problems when stakeholders are involved. Ultimately, an enterprise-wide internal control system must be implemented." He added, "It is desirable to expand personnel to strengthen expertise and conduct regular audits."

The supervisory institution, Nonghyup Central Association, began an on-site audit on the same day. A Nonghyup Central Association official said, "We plan to conduct an on-site audit of the branch and examine whether embezzlement occurred through unsecured loans and the exact scale of the damage."

Meanwhile, the police plan to apply for an arrest warrant after confirming the exact embezzled amount.

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