South Korea suspends four savings banks

South Korea's financial watchdog on Sunday suspended four savings banks because they failed to meet financial-strength standards, after one bank boss was caught trying to flee to China.

The four ordered to halt their operations for six months are Solomon, Mirae, Hanju and Korea Savings Bank, the Financial Services Commission said, amid moves to tighten the banking industry in South Korea.

"All operations of the savings banks including Internet banking were suspended from 6:00am today," the regulator said in a statement.

They were told to appoint new managers and improve their finances within 45 days. They will be put on sale if they fail to do so.

Depositors would be allowed to get back up to 50 million won ($44,000) to avoid a run, the commission said.

It promised to investigate any irregularities by major shareholders and executives of the banks. They were ordered to stay in South Korea for questioning.

Mirae chairman Kim Chan-Kyong was arrested late Thursday while trying to sneak out of the country at a port in the southwestern city of Hwaseong, prosecutors said.

Kim had tried to leave for China by boat in an attempt to avoid investigation and possible punishment over alleged irregularities, Yonhap news agency said, adding four accomplices were also detained by the coastguard.

Last year, the financial watchdog suspended 16 savings banks found to be in difficulty, mainly due to reckless investments in risky property projects.

Financial regulators have launched an extensive probe into irregularities by savings banks since Busan, the country's largest savings bank, was suspended in early 2011.

In February, Busan's eight executives received jail terms of up to 14 years for offences including a lobbying operation aimed at keeping the bank open and $5.3 billion of illegal lending.

Busan was found to have lobbied politicians and government officials to avoid having its operations suspended.

Prosecutors have questioned thousands of people and dozens of government officials, bank executives and others have been charged with corruption. Three bankers have committed suicide.

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Ayungin dilemma Ramon Casiple - Parallaxis
    Ayungin dilemma

    China faces a dilemma in Ayungin Shoal and other contested areas. If it waits for the ITLOS—which may decide against it—it would have tacitly bound itself to UNCLOS and risk a rogue state reputation if it asserts its claim in the South China Sea. If its militarily acts now, it may face international isolation. …

  • 48 nabbed in biggest anti-trafficking catch in Bongao VERA Files - The Inbox
    48 nabbed in biggest anti-trafficking catch in Bongao

    By Jake Soriano, VERA Files Bongao, Tawi-tawi—A team of Marines and policemen intercepted around noon Thursday 48 people, 12 of them minors, believed recruited by a human trafficking syndicate for work in Malaysia. The arrest constitutes what advocates called the … Continue reading → …

  • Docs vow to pay right taxes, make peace with BIR VERA Files - The Inbox
    Docs vow to pay right taxes, make peace with BIR

    By Kiersnerr Gerwin Tacadena, VERA Files Leaders of the medical profession have made peace with their former adversary, the Bureau of Internal Revenue (BIR), and joined forces in a campaign to get doctors to pay the right taxes. BIR Commissioner … Continue reading → …

POLL
Loading...
Poll Choice Options