Yet another loan scandal erupts

A venture businessman was found to have obtained a loan in an illegal way from a mutual savings firm that is affiliated with the venture company. It is similar to the Dongbang Mutual Savings case that involves Chung Hyun-Joon, and it confirmed rumors that a suspected venture businessman has acquired a mutual savings firm and is using it as his private source of funds.

The Financial Supervisory Service (FSS) conducted a special investigation on Yeollin Mutual Savings & Finance Co. and found that the company had offered 37.7 billion won of illegal loan to MCI Korea, its largest shareholder.

The amount is 2.5 times the mutual savings firm's paid-in capital of 15.2 billion won, or 33.5% of its total of 112.5 billion won in loans extended.

This is the second recent major financial incident, coming just a month after illegal loans provided to their leading shareholders by Dongbang Mutual Savings and Daeshin Mutual Savings.

The illegal lending was masterminded by Jin Seung-Hyun, 27, one of the large shareholders of Yeollin Mutual Savings & Finance and president of MCI Korea. He is known as a specialist in mergers and acquisitions. Also, Jin is deeply involved in the fraudulent practices related to foreign capital inducement of Hans Merchant Bank, so it is likely to become another Chung Hyun-Joon gate.

In this connection, the FSS has decided to accuse Jin and five executives of Yeollin Mutual Savings & Finance, calling the Prosecutor's Office to prohibit them from leaving the country. Also, the FSS plans to suspend operation of Yeollin if Jin does not repay 27.8 billion won that he borrowed from the company illegally.