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FSS confirms 63.7 billion won in illegal loans

Posted October. 25, 2000 20:07,   


It has been confirmed that Dongbang and Daeshin Mutual Savings and Finance Companies granted 63.7 billion worth of illegal loans to Chung Hyun-Joon, president of Korea Digital Line, who is also Dongbang¡¯s large shareholder. Of the loans, 8.6 billion won worth were found to have links with investors in Haedong Mutual Savings and Finance (6.2 billion won) and Hanshin Mutual Savings and Finance (2.4 billion won). Following the disclosure, the Financial Supervisory Service started to investigate Haedong officials, widening the scope of the loan scandal.

It was also confirmed that Chang Lae-Chan, an FSS director, invested 350 million won in KDL stocks, but after the stock price dropped and he suffered significant losses, he handed the stocks over to Yoo Jo-Woong, president of Dongbang, and received his entire investment back.

The FSS said Wednesday that it had confirmed that Dongbang and Daeshin loaned 63.7 billion won to KDL President Chung Hyun-Joon and KDL affiliates. Dongbang, based in Seoul, gave loans of 60.7 billion won, while Daeshin, based in Inchon, gave the remaining 3 billion.

Kim Joong-Hoe, director of the non-banking sector investigation, said that 49.4 billion won were loaned to President Chung Hyun-Joon and KDL affiliates, and added that they are continuing investigations to find out where the remaining 14.3 billion won went.

Of the loans from Dongbang, 12 billion won went to four affiliates of KDL, including Stardom Entertainment and Mega Deal. In addition, 7.5 billion won went to Pyongchang Information and Communications and related firms, 26.9 billion won to nine people, including those identified only as Kim and Lee, and 14.3 billion won to five other people, including Hong. Another 3 billion won went to two people, including one identified only as Kang.

Director Kim said that FSS investigators discovered about 20 bank accounts under false names. He said the accounts are currently being traced to determine whether they belong to Chairman Lee Kyong-Ja, who emerged as a central figure in the scandal.