The banking industry here has been stirred up following the arrest warrant sought by the prosecution against KEB Hana Bank Chief Executive Officer Ham Young-joo last Wednesday, in the latest development of the recruitment scandal.

Ham will face a hearing on the arrest warrant on Friday.

If the court decides to issue the warrant, Ham will become the first incumbent head of a South Korean commercial bank to be under arrest on charges of hiring irregularities. 

The prosecution views a banking firm executive’s involvement in the entry-level employment process as obstruction of business, a criminal charge in Korea.

But in January, the court had rejected prosecutors’ request to arrest Lee Kwang-goo, ex-CEO of Woori Bank, on similar charges. Lee, who offered to step down from Woori Bank’s top post in November, was indicted without detention in February, and has since been on trial at a district court.

Also mired in a recruitment scandal is provincial DGB Financial Group and Daegu Bank Chairman Park In-gyu, who was arrested in May, over a month after he resigned from the post in March.

KB Financial Group Chairman Yoon Jong-kyoo is also alleged to have helped his family member get accepted to the group’s KB Kookmin Bank.

On Friday at 2 p.m., Ham will appear at the Seoul Western District Court, where the validity of the warrant sought by the Seoul Western District Prosecutors’ Office will be determined.

Ham has been accused of authorizing the employment of six unqualified applicants that had personal ties with him in 2016. He was also found to have manipulated test scores of some applicants who graduated from prestigious colleges and offered unfair advantages to male applicants in the hiring process. These are some of the findings by the Financial Supervisory Service during its audit of banking firms’ employment process that kicked off last year.

While then-FSS Gov. Choe Heung-sik was found to have allegedly engaged in hiring misdeeds during his stint as Hana Financial Group CEO, the watchdog began to take aim at Hana Financial Group and its banking unit, KEB Hana Bank.

In 2013, 32 employees out of 229 at KEB Hana Bank were hired despite not meeting the threshold for employment, according to the FSS’ findings made open to the press in April.

The FSS requested prosecutors investigate the cases. Prosecutors raided KEB Hana Bank’s offices and internal servers. Two KEB Hana Bank managerial-level staff in charge of recruitment were nabbed.

Prosecutors summoned Choe on May 24, Ham on Friday last week and Hana Financial Group Chairman Kim Jung-tai on Tuesday. 

By Son Ji-hyoung 
(consnow@heraldcorp.com)