IBK under scrutiny over internal controls after major fraud case at China unit
The Industrial Bank of Korea (IBK) is facing scrutiny over its internal controls after its Chinese subsidiary lost 83.4 billion won ($60.3 million) due to financial fraud that allegedly went undetected for months. According to documents submitted Monday by IBK and the Financial Supervisory Service (FSS) to Rep. Shin Dong-wook of the People Power Party, IBK's Chinese subsidiary provided…
The Industrial Bank of Korea (IBK) is currently under investigation regarding its internal control systems following a significant financial fraud case at its Chinese subsidiary. The bank lost 83.4 billion won (equivalent to $60.3 million) due to fraudulent activities that reportedly went unnoticed for several months.
According to documents submitted on Monday by IBK and the Financial Supervisory Service (FSS) to Rep. Shin Dong-wook of the People Power Party, the Chinese subsidiary provided non-face-to-face loans to local borrowers in collaboration with a non-bank financial institution. This entity utilized an online lending platform to attract borrowers and collect loan repayments.
The platform responsible for receiving borrower repayments allegedly manipulated the account details without authorization. Instead of transferring the funds to IBK, the money was allegedly diverted to an unauthorized account. Furthermore, the platform is accused of falsifying records, making it seem as though borrowers had repaid their loans when, in fact, they had not. Consequently, this led to some borrowers being marked as delinquent, despite having made their payments, and IBK was unable to receive the intended funds.
The fraudulent activity began in December.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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