[Editorial] Loan scandal reaches high in gov`t

Although suspicions surrounding Hanvit Bank`s illegal lending is snowballing, the prosecution`s investigation into the case is unconvincingly slow.

The commercial bank has kept mum on the key points of the scandal, while passing the buck to the chief of one of its branches. Despite the bank being a complainant, it raises skepticism that the bank is concealing something worse.

The prosecution and Hanvit Bank revealed that the amount of the loan is 46 billion won, but the figure shows the mere scale of the loans that have not been paid back. Accordingly, the total amount is known to exceed 100 billion won. Nonetheless, the prosecution and the bank declined to disclose the total amount of the loan and the process of the lending the money.

They might contend that there is no problem with the repaid loans, but this is not the case, as the loan volume bears an important meaning. Of course, the money was lent on many occasions through the Hanvit branch office, yet it is not a normal banking practice that a bank branch office could afford to lend such a huge amount of money, totaling 100 billion won, over the past two years.

A consensus among the bank branch shop chiefs is that it is absolutely impossible for a branch head to lend such a huge amount of loans without approval of headquarters.

Park Hyun-Ryong, a former administrative officer at Chong Wa Dae and brother of Park Hye-Ryong, who was arrested and indicted in connection with the scandal, has been pinpointed as the main figure behind the case. Yet the financial circle was of the view that there must have been some "invisible hands" behind the loan scandal. This is why attention is being paid to a former high-ranking Chong Wa Dae official who was specified by a certain Lee, a branch chief of the Korea Credit Guarantee Fund, as the real string puller.

In a petition, Lee claimed that he had received a phone call from the ex-Chong Wa Dae official in February asking for a credit guarantee for the KCGF loan, but when he refused to comply with the request, he was forced to resign from the post two days later. Afterward, Lee was investigated by the special police detachment at Chong Wa Dae in retaliation for his refusal, and the police task force has admitted to that.

If Lee`s assertion is true, the Chong Wa Dae official who applied pressure to the KCGF, is assumed to have pressured Hanvit Bank to make the illegal loan. Further, his pressure on the bank must have been stronger. Hence, the prosecution is required to probe the allegation that the KCGF had been pressured by the aforementioned Chong Wa Dae official before its probes of the Park brothers.

However, the prosecutors are lukewarm in this regard without convincing reasons. In this context, it is essential for the prosecution to shed light on the allegation involving the Chong Wa Dae official before anything else.