By Choi Kyong-ae
Staff Reporter


Kim Seung-yu, chairman of Hana Bank, is under investigation for allegedly unfair stock transactions in which he used ``confidential’’ information to trade stocks for profits, the Financial Supervisory Service (FSS) said Thursday.

The financial regulator is looking into whether Kim was involved in unfair trading when he traded stocks of a company that was invested by another company to which Hana Bank extended loans.

``It’s true that the FSS is investigating the bank’s CEO but we cannot elaborate on the details at the moment,’’ a high-ranking FSS official said.

On top of that, Kim’s second son, who recently quit as a Samsung Securities employee, is also suspected of violating the real-name financial transaction system to borrow his father’s name to join stock transactions of a leading telecommunications company.

The son is said to have left the securities firm after he violated the rule that states securities employees cannot participate in any stock transactions.

In 1993, the Kim Young-sam administration introduced the prohibition of bank transactions under fictitious or borrowed names. And securities employees are forbidden from using inside information to trade stocks.

Hana Bank is the main creditor bank of the telecom company, which is why the FSS suspected that the junior Kim might have obtained confidential information about the company from his father, who had easy access to it.

FSS officials who have led the probe remain cautious about unveiling the results, which they say will be released at the end of this month.

Meanwhile, Hana Bank submitted an application on July 8 to transform the bank into a financial holding company in November. The FSS was scheduled to decide whether to permit the application Thursday.

Regardless of Kim and his son’s involvement in unfair trading, chances are that Hana Bank will have stumbling blocks on its way to the financial holding group this year.

godamon@koreatimes.co.kr