[Exclusive] Illegal loan scandal

[Anchor]

Prosecutors wrapped up their investigation into Woori Bank’s illegal loan scandal earlier this year by indicting five individuals, including former chairman Son Tae-seung.

However, the KBS investigative team has discovered additional suspicious loans that were not included in the prosecution’s original indictment.

Exclusive report by Hwang Hyun-kyu.

[Report]

This is a commercial-residential building in Gwanak-gu, Seoul.

In 2021 and 2022, loans were issued using the second-floor commercial space as collateral.

Upon checking the registration, the amount of the mortgage was about 1.2 billion won.

This means the loan amount is around 1 billion won.

We inquired about the market price at a nearby real estate agency.

[Real Estate Agency: "Maybe around 780 million won? There are hardly any transactions. (Is it possible to get a loan higher than the market price?) Honestly, that’s not possible."]

The sparse transaction history makes the market price unclear, but loans exceeding property value are highly unusual.

A closer look at the loan details reveals the answer.

The lender was Woori Bank.

The borrower was a corporation.

The actual owner of the corporation is Mr. Kim.

According to our investigation, he is the older brother-in-law of former Woori Financial Group chairman Son Tae-seung.

[Son Tae-seung/Former Chairman of Woori Financial Group/Dec. 2024: "(Do you acknowledge the allegations of directly instructing or condoning illegal loans?) ...."]

In March, the police searched Woori Bank and secured loan documents.

They confirmed allegations that the loan review was conducted based on a fake contract that inflated the sale price beyond the actual value.

The police investigation found that the two corporations owned by Mr. Kim received a total of four illegal loans amounting to 4.7 billion won.

The parties involved, the methods used, and the circumstances were identical to the loan case at Woori Bank that was indicted in January, but they were omitted from the charges brought to court.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency, which identified additional loan allegations, transferred Son's brother-in-law and a former Woori Bank executive involved in the loans to the prosecution last month.

This is KBS News, Hwang Hyun-kyu.

[Anchor]

The four problematic loans were also identified by Woori Bank through its internal audit, and they organized the facts in detail and even filed a complaint.

So why were they omitted from the prosecution's indictment?

Reporter Song Soo-jin traces the process.

[Report]

The illegal loan period identified in the Woori Bank case spanned from May 2021 to Aug. 2023.

When two branches began showing signs of delinquency, Woori Bank launched an internal audit at the end of 2023.

Despite losses exceeding 300 million won, they didn’t report the case to the Financial Supervisory Service.

After media reports intensified, Woori Bank filed a complaint with the police.

[KBS News9/Aug. 2024: "Even a suspicious loan tied to the former chairman has come to light."]

The complaint listed 23 illegal loan cases.

The four cases, amounting to 4.7 billion won, which KBS additionally confirmed, were also included.

In August last year, the police accelerated their investigation by applying for a search warrant.

However, on the day of the warrant application, the prosecution requested to transfer the case, stating that they had begun their own investigation at the request of the Financial Supervisory Service and that overlapping investigations would be difficult.

After a five-month investigation, the prosecution announced their findings in January this year, identifying 51.7 billion won in illegal loans.

However, the four loans in question were left out.

In response to KBS's inquiry about why the allegations, which were included in the complaint and had the same individuals and methods, were omitted, the prosecution replied that the investigation materials received from the Financial Supervisory Service were extensive, and it seemed difficult to conduct a perfect investigation of multiple cases simultaneously.

They mentioned that there might have been an error in the process of receiving materials from the Financial Supervisory Service and stated that they are currently trying to ascertain the exact circumstances.

The police, after cross-checking the prosecution’s indictment for final case closure, noticed the missing charges and launched a follow-up investigation in March but this time, the prosecution did not ask the police to hand over the case mid-investigation.

This is KBS News, Song Su-jin.