Shinhan Financial Group Pres. Suspected of Embezzlement

Shinhan Bank filed a criminal complaint Thursday against former CEO and current Shinhan Financial Group President Shin Sang-hoon for embezzlement and breach of duty.

Bank unions have in the past filed criminal complaints against their CEOs over labor disputes, but this is the first time for such a complaint to cover alleged breach of duty in extending loans.

The bank said it filed a criminal complaint against certain employees, including Shin, for breach of trust and embezzlement under the Act on the Aggravated Punishment of Specific Crimes.

The complaint said Shin’s relative received a huge loan while Shin served as CEO between March 2003 and February last year. He allegedly committed breach of trust in extending a loan of 95 billion won (80.4 million U.S. dollars) to a leisure company in Paju, Gyeonggi Province.

The bank also said Shin is suspected of embezzling money from the loan and that his brother-in-law was as an executive at the leisure company.

The group concluded that Shin cannot properly perform his work because of the charges and decided to hold a board meeting to dismiss him.

Shin denied the allegations against him, saying, “Loan-related staff decide loan matters and the bank CEO has no right to approve such loans. It is impossible to extend loans illegally.”

cha@donga.com