Prosecutors said Wednesday they have charged a former and an incumbent executive of South Korea's third largest banking group with embezzlement. They said Shin Sang-Hoon, former chief executive officer of the Shinhan Financial Group, was charged with embezzlement, breach of trust and violation of banking rules.
Shin is accused of extending 43.8 billion won (38.2 million dollars) in illegal loans to his relatives and of pocketing consultancy fees. Prosecutors said Lee Baek-Soon, current president and CEO of the group's Shinhan Bank, was charged with embezzlement and violation of banking rules. But they cleared former group chairman Ra Eung-Chan of suspicions that he took consulting fees, and dropped charges that he had opened accounts using other people's identities. The trio have been locked in a damaging internal feud, filing suits and countersuits, after Shinhan Bank asked prosecutors to investigate Shin over corruption allegations.
Shin and Lee were not detained. Shin, who stepped down earlier this month, told reporters he had never used company money for his own purposes. Ra resigned in October to assume responsibility for the feud, which has seriously undermined the reputation of the group.
Lee Wednesday also announced his intention to quit. "It will take a considerable time for the court to make a decision on the indictment," he said in a statement, adding he wants to avoid causing concern to clients, shareholders and employees. Shinhan Financial said it will name a new CEO for the bank on Thursday. Korean-Japanese investors hold a combined 17 percent stake in Shinhan Financial, making them the biggest shareholders. French bank BNP Paribas is the second largest, with 6.35 percent.
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