[1mm Financial Talk] This Time, the General Election Whirlpool... Saemaeul Geumgo's Ordeal

Published 02 Apr.2024 08:39(KST)

Updated 02 Apr.2024 08:45(KST)

Yang Moon-seok, Democratic Party of Korea candidate for Ansan Gap, Gyeonggi Province. Photo by Yonhap News Agency

Saemaeul Geumgo, which has faced various adversities from last year's bank run crisis to this year's sharp rise in delinquency rates, is now struggling as it becomes the center of attention in the April 10 general election issue.

According to the Saemaeul Geumgo Central Association on the 2nd, an on-site inspection of Daegu Suseong Saemaeul Geumgo, where allegations have been raised that the child of Yang Moon-seok, the Democratic Party candidate for Ansan Gap in Gyeonggi, received an 'improper loan,' has been underway since the morning of the previous day. There is a possibility that the inspection may take some time as the opinions of candidate Yang and Suseong Saemaeul Geumgo differ. A Saemaeul Geumgo Central Association official said, "Although the inspection period has not been set, it seems the on-site inspection will take some time," adding, "It could last at least several days."

In August 2020, candidate Yang purchased an apartment worth 3.1 billion KRW in Jamwon-dong, Seocho-gu, Seoul. Yang bought the apartment by borrowing 630 million KRW from a loan company and money from acquaintances, and eight months later, Yang's daughter took out a business loan of 1.1 billion KRW from Suseong Saemaeul Geumgo to repay the loan company debt and personal debts.

The problem is that Yang's method closely resembles illegal "work loans" that financial authorities have been cracking down on. Work loans involve obtaining a business mortgage loan without the intention of using it for business purposes and using it to purchase a house. In 2022, the Financial Supervisory Service uncovered numerous illegal work loans by savings banks and imposed sanctions. Yang's side claims that the loan was proposed by Saemaeul Geumgo and proceeded accordingly, while Suseong Saemaeul Geumgo states that they reviewed the necessary documents for the business loan and processed it normally.

The ruling party's final offensive continues. On the 31st of last month, Han Dong-hoon, the Emergency Committee Chairman of the People Power Party, launched a fierce attack, calling it a "fraudulent loan that harmed the public." On the previous day, Yoon Jae-ok, the floor leader of the People Power Party, visited the Saemaeul Geumgo Central Association in Gangnam-gu, Seoul, and after meeting with Chairman Kim In, said, "We urge a swift completion of the inspection to inform the public of what needs to be disclosed and, if there are matters requiring more time, to promptly inform the public of the interim situation." The People Power Party has filed a criminal complaint against candidate Yang for fraud.

In response, candidate Yang, who had taken a strong stance denying fraud loans due to the absence of victims, bowed his head on the afternoon of the previous day, saying, "To avoid further controversy, I will dispose of the apartment and urgently repay the Saemaeul Geumgo loan."

However, the controversy is expected to continue for some time. Although Saemaeul Geumgo has been working on image reform by announcing innovation plans since November last year, it has once again become embroiled in political issues, attracting criticism. If no proper results come out of this investigation, a full-scale investigation of over 1,200 Saemaeul Geumgo branches nationwide may be conducted.