FSS, BOK conduct joint probe into KB Financial's alleged irregularities

SEOUL, Jan. 14 (Yonhap) -- The financial market regulator and the central bank
launched Thursday a joint probe into the nation's top financial company KB
Financial Group Inc. over allegations of irregularities in the firm's investments
and outside board.
The Financial Supervisory Service (FSS) sent 42 inspectors to the headquarters
and computer system center of KB Financial and its flagship unit Kookmin Bank in
Yeouido, central Seoul for the regular annual examination that will last till
Feb. 5.
The financial regulator is expected to see if the group's loss-making investment
on Bank Center Credit in Kazakhstan and issuance of US$1 billion in covered bonds
on May last year were made in violation of financial market regulations.
The Bank of Korea also dispatched nine workers for the four-week audit and is
expected to look into Kookmin Bank's foreign-exchange operations and bank risk
management.
The latest move is the FSS's first probe into the nation's four-largest financial
firms, which also control the top four lenders, after the watchdog said it will
launch a full-scale inspection of the four groups every year from 2010.
The audit came amid market allegations that the financial authorities may have
influenced Kookmin Bank chief Kang Chung-won's resignation on Dec. 31 from the
chairman of the parent company. Kang cited the interests of the group when he
stepped down, amid scrutiny by the regulator of alleged wrongdoings by the group
and its outside board when electing Kang to the top position.
pbr@yna.co.kr
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