FSS extends inspection on scandal-tainted Woori Bank

Woori Bank headquarters in Seoul / Yonhap

By Lee Min-hyung

The Financial Supervisory Service (FSS) will extend its inspection of the scandal-tainted Woori Bank, citing the need to look deeper into the lender's internal control system after one of its employees was arrested for allegedly embezzling more than 60 billion won ($47.3 million) from the lender last month.

The financial authority was supposed to wrap up its investigation on May 27, but decided recently to extend the timeline to June. The FSS cited the need for more time to get the facts straight surrounding the scandal, as the employee allegedly started engaging in the criminal act in 2012.

Under the latest decision, the financial watchdog is widely expected to investigate in detail whether Woori Bank's internal control system has been operating properly for the past decade.

In late April, the FSS launched its investigation into the lender, and while conducting the month-long probe, it uncovered evidence that the employee had allegedly embezzled an additional 5 billion won from what was known previously.

The employee is under investigation for three instances of alleged embezzlement between October 2012 and June 2018.

The FSS has also increased the number of inspectors, including experts in data restoration, to check whether the employee had conducted any other illegal activities and why Woori Bank's internal control system had failed to detect the activity.

The regulator has not decided on a new endpoint for the investigation, but it will take at least a couple of weeks to do so. The deadline could even be extended once more if more evidence is discovered.

After the incident made headlines last month, the FSS requested all financial firms here to submit documents on the operations of their internal control systems.

A spokesperson for the FSS was unavailable for comment.

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