This is a followup story on these previous posts, here & here.From the Korean Times
By Lee Hyo-sik
Prosecutors raided the headquarters of Samhwa Mutual Savings Bank and a residence of its chairman, Friday, on suspicion that the bankrupt savings bank had illegally extended loans to construction firms and other borrowers.
The Seoul Central Prosecutors’ Office said investigators searched the bank headquarters in southern Seoul as well as the homes of its chairman and other senior executives and confiscated computer hard disks and financial documents.
The raid came three months after the Financial Supervisory Service (FSS) suspended the savings bank’s operation for six months and filed a complaint with the prosecution about its alleged illegal lending to builders and other borrowers.
A prosecution official said after completing the analysis of seized documents and computer files, investigators will summon the Samhwa chairman and others involved in the bank’s suspected lending irregularities for questioning.
They are looking into whether the savings bank followed standard procedure when extending loans, which later went sour.
Samhwa’s senior executives are also suspected of engaging in illegal lending to extend loans to businesses and individuals that were ineligible.
The Seoul-based savings bank’s debts exceeded assets by 50.4 billion won ($45.2 million) and its capital adequacy ratio fell to minus 1.42 percent in June last year, lower than the mandated regulatory minimum level of 1 percent.
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