Suspended Korean Savings Bank Chief Found Dead in Hotel Before Questioning
By Seonjin Cha – Jan 12, 2012 11:00 PM ET
The biggest shareholder of Ace Mutual Savings Bank, a South Korean lender whose operations were suspended last year by the regulator, was found dead yesterday ahead of scheduled questioning by prosecutors.
The body of Kim Hak Heon, chairman of Incheon, South Korea- based Ace Mutual, was discovered in a Seoul hotel room, the city’s Bangbae district police authorities said in a statement posted on their website. Prosecutors had planned to question Kim yesterday regarding allegations of illicit lending and accounting fraud, the police said.
Ace Mutual was one of 16 savings banks shuttered by South Korean regulators last year as developers defaulted on loans amid a slowdown in the real-estate market. South Korean prosecutors last year indicted more than 100 people including shareholders, executives of the savings banks and government and regulatory officials over lax management and oversight as well as misuse of funds.
Kim owned a 56 percent stake in closely held Ace Mutual, according to the bank’s regulatory filing. The lender had total assets of 991.8 billion won ($860 million) as of June, according to Financial Services Commission data.
A woman who answered two calls to the Supreme Prosecutors’ Office of Korea declined to comment or connect the calls to a spokesman and refused to give her name, and there was no response to an e-mail sent by Bloomberg News. A person who answered the phone at Ace Mutual’s headquarters in Seoul also declined to comment and refused to provide her name.
Korea Deposit Insurance Corp., the state-run firm leading the sale of the suspended savings banks, chose Hana Financial Group Inc. (086790) last month as a preferred bidder to buy assets from Ace Mutual and Jeil II Savings Bank.
South Korea’s regulator has pledged to tighten scrutiny of savings banks and limit their operations to protect their main customers, who are primarily low-income borrowers and small businesses. The combined assets of the savings banks are less than 3 percent of the country’s financial assets, the Financial Services Commission said last year.
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