South Korea’s financial regulator recommended sanctions against Ra Eung Chan, the former chief executive officer of Shinhan Financial Group Co., for opening bank accounts in other people’s names.
The penalty committee of the regulator today decided to impose a sanction equivalent to three months of suspension from duty for Ra, the Financial Supervisory Service’s spokeswoman Kim Soo Mi said by telephone following the committee’s meeting. A final decision will be made following further review by a higher committee, she said.
That would bar Ra, 71, from seeking an executive role at Shinhan or any other financial company for the next four years. He stepped down from his posts as chairman and CEO of Shinhan on Oct. 30 amid the government probe while retaining his board seat at South Korea’s biggest financial company.
Shinhan’s banking unit received an institutional warning by the regulator, and 25 other officials at the lender were punished over Ra’s violations, according to Kim.
Shinhan Bank spokesman Kim Young Gil in Seoul declined to comment on the committee’s recommendations by telephone, and Ra didn’t respond to an e-mail seeking comments.
South Korean prosecutors raided the office of the secretary of Shinhan Bank’s CEO on Nov. 2, Shinhan Financial said in an e-mail, confirming a Yonhap News report.
Prosecutors are investigating Shinhan Financial President Shin Sang Hoon after Shinhan’s banking unit on Sept. 2 filed a complaint to prosecutors that alleged breach of duty and embezzlement. The president denied the allegations. Four Shinhan shareholders filed a lawsuit in September, seeking dismissal of Shinhan Bank CEO Lee Baek Soon.
Shinhan Financial’s board on Oct. 30 elected director Ryoo Shee Yul as acting CEO. He will serve until a new management team is appointed at a shareholder meeting in March.
The regulator also plans to conduct regular inspection of Shinhan Financial’s overall businesses later this month, Governor Kim Jong Chang told lawmakers on Oct. 22.