Prosecutors raid suspended savings banks

Prosecutors said Monday they have raided four savings banks to investigate alleged irregularities that led to their operations being suspended a day earlier. Investigators raided the head offices of Solomon Savings Bank, Mirae Savings Bank, Korea Savings Bank and Hanju Savings Bank, along with the homes of each bank's executives, prosecution officials said. The raids came one day after South Korea's financial regulators suspended the banks' operations for their failure to meet the capital adequacy ratios recommended by the Bank for International Settlements (BIS) standards. The financial institutions are suspected of giving out illegal loans, while their top shareholders and management are suspected of embezzlement and bribery. The raids are aimed at securing documents, computer hard drives and other evidence that could support the allegations, the officials said. Major shareholders and executives of the suspended savings banks have already been banned from leaving the country. Prosecutors said they expect to seek an arrest warrant for Kim Chan-kyong, chief executive of Mirae Savings Bank, after he was caught trying to flee to China last week. It is the second time since September that the financial watchdog has suspended savings banks. The Financial Services Commission suspended 16 savings banks last year for their heavy debts and insufficient capital adequacy ratios in an effort to overhaul the ailing industry.