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IBK Industrial Bank of Korea headquarters. (Photo: IBK) |
[Alpha Biz= Paul Lee] SEOUL, South Korea – June 11, 2025 — Two former and current employees of IBK Industrial Bank of Korea appeared in court on Tuesday for a second round of pretrial detention hearings in connection with a large-scale improper lending scheme totaling KRW 88.2 billion (approx. USD 64 million).
Judge Park Jung-ho of the Seoul Central District Court presided over the detention hearings for Mr. Cho, a current IBK employee, and Mr. Kim, a former employee. Both face charges under the Act on the Aggravated Punishment of Specific Economic Crimes, including breach of trust and fraud. Neither defendant responded to questions from reporters as they entered the courtroom.
The investigation stems from a report by South Korea’s Financial Supervisory Service (FSS), which uncovered an extensive network of improper loans allegedly orchestrated by IBK employees, their spouses, former colleagues, and personal acquaintances.
Kim, who left IBK and later operated real estate and legal services businesses under borrowed names, is accused of illegally obtaining KRW 78.5 billion in loans between June 2017 and 2024. He allegedly collaborated with his spouse, an IBK credit officer, and 28 current and former employees of the bank, according to the FSS probe.
Although the full amount was cited in regulatory findings, prosecutors reportedly cited a smaller figure in the formal indictment. Investigators have also uncovered evidence suggesting that Cho accepted kickbacks from Kim in return for facilitating loan approvals.
Prosecutors initially sought detention warrants in late May, following a series of raids at IBK’s headquarters beginning in March. However, the court dismissed the request, citing concerns over the defendants’ right to defense.
With recent precedent in similar fraud cases and the gravity of the alleged offenses, prosecutors have reapplied for arrest warrants. The court’s decision is expected late Tuesday.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
