Financial Supervisory Service Begins Inspection of Hi Investment & Securities over Suspected 'Real Estate PF Squeeze'

Suspicions of Aggressive Sales Tactics and Favoritism in Task Allocation Raised at the National Audit Session

The Financial Supervisory Service (FSS) has launched an inspection into Hi Investment & Securities following allegations of misconduct in its real estate project financing (PF) department.

According to financial sources on the 9th, the FSS requested the submission of materials for an unscheduled inspection of the real estate PF-related department at Hi Investment & Securities.

Earlier, during the National Assembly's Political Affairs Committee audit last month, allegations surfaced regarding Hi Investment & Securities' "tying sales" and preferential treatment of related parties. Tying sales refer to the practice of forcing customers to subscribe to other products as a condition for receiving loans.

At the audit, Kim Jong-min, a member of the Democratic Party of Korea, pointed out the tying sales practice, stating, "Hi Investment & Securities grants loan agreements on the condition that the borrower purchases the company's non-performing loans (NPLs)."

Additionally, there were allegations that Hi Investment & Securities funneled approximately 15 trillion won worth of short-term bond transactions to Heungkuk Securities, where the son of the head of Hi Investment & Securities' real estate division works.

At the time, Hong Won-sik, CEO of Hi Investment & Securities, denied the tying sales allegations, saying, "(Tying sales) were practices before 2010, and such things do not occur in the primary financial sector." Regarding the preferential treatment allegations, he responded, "An audit is underway, and we are conducting a thorough investigation."

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