A 45-year-old exec at Korea’s Woori Bank was put on notice this morning after police raided his office for evidence of a construction scheme gone bad, reports Korea Times. Chun’s scheme allegedly involved guaranteeing a $315 million loans to finance a real estate project in Beijing, in return for $2.3 million in kickbacks.
What’s interesting here is Chun’s scheme might have worked if the Chinese market was as hot as he thought.
Turns out the Beijing property has been sitting on the market for years. Rather than a quick cash-in, the loan became a red flag on Woori’s balance sheet.
Separately, Woori Bank reported losses of around 200 billion won resulting from payment guarantees for soured project financing deals last June, according to the Financial Supervisory Service (FSS). The financial watchdog said that the lender provided guarantees for such projects worth a total of 4.2 trillion won for six years from 2002 to 2008.
A Woori Bank representative said the 380-billion-won loan for the Beijing property has not been included as losses yet because it has yet to be determined how much can be salvaged from the property, which remains unsold.