Busan Saemaul Geumgo Executives Indicted on Suspicion of 9 Billion Won in Bad Loans

The Busan District Prosecutors' Office's Western Branch indicted the chairman and executive director of a Saemaul Geumgo in the Busan area, along with one other person, on detention charges for allegedly granting a nonperforming loan of about 9 billion won to a development contractor in violation of lending regulations. One other executive director was indicted without detention on the same charges. According to the prosecutors, they were investigated for having lent money to two development contractors around 2020 without reviewing lending eligibility or conducting a screening process. Prosecutors said it was also confirmed that the related documents had been prepared only formally, making it difficult to recover the principal and interest. The prosecutors also said they believed that this joint loan led to a deterioration in the financial soundness of the Saemaul Geumgo. The credit union is said to have received measures from the central association starting in 2024, including recommendations and demands for management improvement and designation as a credit union with concerns over insolvency. Prosecutors also said they confirmed whether the accused had threatened employees who were under investigation or carried out retaliatory personnel actions.