Six South Korean banks have accepted a court-mediated settlement to end a four-year dispute with Korea Trade Insurance Corp. in a trade finance fraud case, The Seoul Economic Daily reported.
KEB Hana Bank, NongHyup Bank, Industrial Bank of Korea, Korea Development Bank, KB Kookmin Bank and Suhyup Bank accepted the settlement by the July 27 deadline.
The South Korean banks had filed individual lawsuits seeking a total of 365 billion won in loan repayments from the state trade insurance provider in connection with 3.2 trillion won of export financing which South Korea-based electronics company Moneual Inc. fraudulently obtained using trade insurance guarantees and bogus export transactions over a period of seven years until it went bankrupt in 2014.
The damages sought by the banks from Korea Trade Finance were 99 billion won for Industrial Bank of Korea, 91.6 billion won for KEB Hana Bank, 62 billion won for NongHyup Bank, 55 billion won for KB Kookmin Bank, 46.5 billion won for Korea Development Bank and 11 billion won for Suhyup Bank.
Lower-court outcomes differed for different banks, but the Seoul High Court issued an arbitration ruling granting 50% of the claimed damages to all of the six banks on July 13. Korea Trade Finance is also expected to accept the settlement.
Some of the South Korean banks will continue to pursue U.S. litigation against two U.S. vendors in a related case. This U.S. lawsuit filed in Los Angeles in 2017 claims US$230 million in damages from U.S.-based e-commerce operator Newegg Inc. and other vendors for helping Moneual forge trade receivables.
As of July 27, US$1 was equivalent to 1,116.45 South Korean won.