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In a shocking revelation, a former loans manager at South Korea’s NH Bank (NongHyup), who is currently embroiled in a scandal involving embezzlement, stated that he has “lost everything.” The NH Bank has accused the manager, identified only by the surname Kim, of misappropriating funds amounting to approximately $12.5 million to finance cryptocurrency investments.
Unauthorized Embezzlement
According to the South Korean broadcaster JTBC, NH Bank became aware of Kim’s suspicious activities during an internal audit that took place in August of this year. The audit discovered that Kim allegedly stole funds “on 106 occasions over a four-year span,” covering the period from June 2020 to August 2024. The investigation revealed alarming details regarding the flow of loans at a branch located in the capital, Seoul.
Illegitimate Loan Practices
The findings indicated that one of the loans authorized by Kim, which exceeded $7.3 million, was backed by fictitious real estate as collateral. Reports suggest that Kim orchestrated these loans by using the identities of acquaintances and other individuals. In a candid admission, Kim stated, “I took out loans using non-existent real estate as collateral. I invested in crypto. But I lost everything, so I don’t have any money.”
Investigation Findings and Forgery
Kim’s fraudulent loan activities were further characterized by the forgery of critical documents, including the creation of fake real estate registry certificates. The NH Bank has estimated that of the $12.5 million allegedly misappropriated, approximately $8.8 million was taken through unauthorized lending practices. The bank has confirmed that their investigation is ongoing and is now scrutinizing additional employees for potential misconduct.
NH Bank’s Response and Future Prevention
In light of these serious allegations, a spokesperson for NH Nonghyup Bank stated, “We will resolve all problematic issues involved in this case. We will continue to improve our system to prevent a recurrence.” This declaration emphasizes the bank’s commitment to enhancing its monitoring and control mechanisms to avert future financial discrepancies.
Concerns over Internal Auditing Practices
Interestingly, JTBC highlighted that NH Bank had implemented a system of roving auditors a decade ago, intended to unify monitoring efforts across its branches. However, it was noted that all 369 roving auditors are former NH Bank employees, raising concerns about the impartiality of these internal checks. Kang Jun-hyun, a member of the National Assembly’s Political Affairs Committee, echoed these sentiments by calling for a more objective auditing process. He criticized the recurrent financial issues, stating, “Financial accidents continue to occur. So the National Assembly will carefully examine the matter to ensure that internal control systems are in place.”
Comparative Scandals in the Banking Sector
NH Bank is not the only South Korean financial institution facing scrutiny for similar breaches. Woori Bank experienced a comparable scandal earlier this year, where a former loan manager from Gimhae was accused of embezzling approximately $7.3 million to fund his cryptocurrency investments. In his confession, the ex-Woori employee revealed that the majority of his investments in cryptocurrency had failed, mirroring Kim’s unfortunate outcome.
These incidents illuminate the growing concern regarding the intersection of traditional banking and the volatile world of cryptocurrency, and they raise crucial questions about regulatory oversight in the financial sector.
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