Prosecutors to summon former FSS chief this week for bank probe

SEOUL, June 1 (Yonhap) -- The prosecution will summon a former governor of the financial regulator later this week for questioning over fresh allegations that a scandal-ridden savings bank had asked him to help lessen punishment for its irregularities, officials said Wednesday.
Kim Jong-chang, 63, was allegedly requested by a former state auditor accused of serving as a lobbyist for the bank to use his influence to cover up the results of a probe by the regulator early last year that concluded the bank had offered illegal loans and manipulated a key financial status report.
Kim completed his three-year term as governor of the Financial Supervisory Service (FSS) in March.
"We are fine-tuning the schedule for calling him in. We will inform him as soon as the schedule is fixed," an official from the Supreme Prosecutors' Office said.
Kim showed an intent through his lawyer to appear before the prosecution, prosecutors said.
On Tuesday, prosecutors detained Eun Jin-soo, the former high-level official of the Board of Audit and Inspection (BAI), for questioning over allegations that he took bribes from the now-suspended bank in exchange for lobbying influential government officials and politicians over the bank's fate.
Prosecutors said Kim will be summoned as a witness, not as a defendant, this time, but his status can be changed if he is found out to have meddled in FSS inspections on the bank.
Kim, if summoned, will be the third ex-FSS governor to receive a criminal probe over a corruption case that took place while in office.
Investigators said they will interrogate Kim over whether he was directly or indirectly involved in reducing the intensity of the regulator's inspection into the bank and its four affiliated banks as well as punishment on them.
Prosecutors said they are also investigating into an allegation that Kim had worked for a real estate trust company before he took office as the FSS governor in March 2008. The company is known to have invested 9 billion won (US$8.3 million) in buying stocks of Busan Savings Bank and sold part of them.
The Busan Savings Bank scandal has jolted the nation for months since the bank was accused of tipping off its employees' relatives and VIP customers about its impending suspension in February so as to help them withdraw their deposits in advance.
The bank was later found to have engaged in extending illegal loans to large shareholders and other financial irregularities involving 7 trillion won in total, leading its chairman, Park Yeon-ho, and several major shareholders to be prosecuted.
Up until now, over 10 former and incumbent ranking FSS officials have been arrested or indicted with over 40 low-level officials questioned in connection with the prosecution's probe into irregularities of ailing savings banks, including Busan Savings Bank.
brk@yna.co.kr