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A previous loans manager at South Korea’s NH Bank (NongHyup), who faces allegations of misappropriating company funds for cryptocurrency purchases, has stated that they “lost everything.”
According to the broadcaster JTBC, NH suspects that a manager with the surname Kim embezzled a total of $12.5 million in loans.
NH Bank Employee ‘Misappropriated Loan Funds for Crypto’
The bank discovered signs of irregularities during an audit conducted in August of this year. NH reportedly believes that Kim misappropriated funds “on 106 occasions over four years,” from “June 2020 to August 2024.”
JTBC reported that it had reviewed the audit, commissioned by NH headquarters, which outlined “a questionable flow of loans at a branch” located in the capital, Seoul.
The internal audit also determined that a loan exceeding $7.3 million was “secured using non-existent real estate as collateral.”
Kim allegedly facilitated the loans by using the names of “acquaintances and other individuals.” Kim was quoted as saying:
“I took out loans using non-existent real estate as collateral. I invested in crypto. But I lost everything, so I don’t have any money.”
Details about allegedly fraudulent loan transactions “carried out by an employee” from an NH Bank audit. (Source: JTBC/Screenshot)
The media outlet indicated that Kim obtained loans by “forging documents,” which included creating “fake real estate registry certificates.”
NH Bank has reportedly already established that $8.8 million of the $12.5 million total was misappropriated through “illegal lending” practices.
The bank stated that its investigation is ongoing and mentioned that it is “currently looking into more” of its “employees.”
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“We will address all problematic issues related to this case. We will continue to enhance our system to prevent a recurrence.”
NH Nonghyup Bank spokesperson
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The media outlet highlighted that a decade ago, NH initiated a network of mobile auditors tasked with conducting spot checks at its branches.
The NH Bank (NongHyup) logo outside a bank branch in South Korea. (Source: MBC News/YouTube/Screenshot)
However, the outlet noted that all 369 of the bank’s mobile auditors “are former Nonghyup Bank employees.”
Kang Jun-hyun, a lawmaker and member of the National Assembly’s Political Affairs Committee, stated that the mobile auditor system requires greater impartiality.
“Financial incidents continue to occur. Therefore, the National Assembly will thoroughly investigate the matter to ensure that internal control systems are established.”
South Korean Lawmaker Kang Jun-hyun
Trading in South Korean bonds through accounts set up for foreign investors reached 4.5 trillion won ($3.3 billion) in early October https://t.co/qcHaIVpRKz
— Bloomberg (@business) October 17, 2024
NH’s competitor Woori appears to have experienced a similar breach earlier this year.
A former loan manager from Woori based in Gimhae has also been accused of misappropriating funds for cryptocurrency purchases.
In June, the ex-Woori employee admitted to stealing approximately $7.3 million of the bank’s funds to “primarily invest in crypto.”
The individual claimed in June this year that most of his subsequent cryptocurrency investments had “ended in failure.”
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