The China unit of the Industrial Bank of Korea (IBK) has been defrauded of over 83.3 billion won (HK$471.8 million) by a mainland online loan platform in an embezzlement and data forgery scheme, Yonhap News Agency reported.
Shin Dong-wook, lawmaker of the National Assembly's National Policy Committee revealed the incident on Sunday, citing data from the Financial Supervisory Service and the bank, according to Yonhap.
IBK's China subsidiary had partnered with a local non-bank financial institution, identified as Company A, to offer online loans, the report said.
Under the partnership, Company A used an online platform, Company B, to attract borrowers and collect repayments before settling with the bank. However, Company B secretly changed the repayment accounts, embezzled the funds, and forged electronic data to fake normal transactions, Yonhap reported.
Local borrowers were left in default with damaged credit scores as a result, while IBK failed to recover the principal and interest, according to Yonhap.
IBK claimed it checked daily repayment details but only discovered the missing settlement funds on June 24, the report added.
Yonhap noted that IBK missed earlier risk signals after five Chinese financial institutions cut ties with Company B between March and April. While IBK disclosed the 83.37 billion won accident on July 15, it has yet to finalize the exact estimated losses or recovered amounts.
