|People stand in the lobby of the Korea Exchange Bank headquarters in Seoul. (Yonhap News)|
Prosecutors raided the Korea Exchange Bank’s main office Tuesday as part of an investigation into allegations that the nation’s fifth-largest lender took profits by illegally raising interest rates on loans to small and medium-sized firms.
The Financial Supervisory Service requested the investigation on March 5 claiming that the bank gained some 18.1 billion won ($16.2 million) through rate manipulations between 2006 and 2009.
The prosecutors seized computer hard drives and data from CEO Yun Yong-ro’s office and the bank’s computer room at its headquarters in central Seoul.
According to the FSS, the overcharging was mostly conducted when U.S.-based equity fund Lone Star held a majority stake in KEB.
The financial regulator issued warnings to the bank and former CEOs and ordered it to reimburse borrowers the overcharged interest. It is the second bank to be probed over interest-rigging after Nonghyup Bank was investigated last year.
The Seoul Central District Prosecutor’s Office said that it would decide later whether to extend the inquiry into KEB’s other branches depending on the results of the initial investigation.
By Oh Kyu-wook