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South Korean prosecutors indict 38 over banking industry hiring scandal


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According to Market Intelligence, April 2023

South Korean prosecutors indict 38 over banking industry hiring scandal

South Korean anti-corruption prosecutors investigating hiring irregularities at six local commercial banks issued criminal indictments against 38 people, including former and current CEOs, and two banks, the country's Supreme Prosecutors' Office said June 18.

The investigation was based on findings provided by the Financial Supervisory Service in October 2017 and January 2018 after its probe into KB Kookmin Bank, KEB Hana Bank, Woori Bank, BNK Busan Bank Co. Ltd., Daegu Bank Ltd. and Kwangju Bank Ltd.

The investigation into Shinhan Financial Group Co. Ltd. unit Shinhan Bank Co. Ltd. is still ongoing based on FSS data handed over in May.

KEB Hana Bank CEO Ham Young-joo is the only incumbent CEO indicted in the banking industry nepotism scandal.

KB Financial Group Inc. CEO Yoon Jong-kyoo and Hana Financial Group Inc. CEO Kim Jung-tai, also targeted in the investigation, avoided a criminal indictment.

KEB Hana Bank and KB Kookmin Bank were also indicted for their organizational involvement in hiring corruption. KB Financial is the parent of KB Kookmin Bank, while Hana Financial is the parent of KEB Hana Bank.

The prosecutors' indictments invoke obstruction and bribery charges as well as equal employment opportunity violations based on evidence of influence peddling, quid pro quo manipulation, and gender and school discrimination in hiring new employees.

BNK Busan Bank is a unit of BNK Financial Group Inc., while Daegu Bank and Kwangju Bank are units of DGB Financial Group Co. Ltd. and JB Financial Group Co. Ltd., respectively.