Prosecutors in South Korea have decided not to indict commercial bank KEB Hana Bank for offering preferential loans to Chung Yoo-ra, according to a news report Monday.

Chung, 22, is a daughter of Choi Soon-sil, ex-president Park Geun-hye’s longtime confidante who was sentenced to 20 years behind bars in February for a corruption scandal which led to the impeachment of Park last March.

KEB Hana Bank issued a standby letter of credit worth 386,600 euro ($476,200) to Chung in 2014, when she was 19. Chung put up a 230,000 square-meter piece of land in Gangwon Province as collateral in 2015. Chung was able to take out 385,000 euro of loans in the bank’s branch in Germany, while not leaving a trace of foreign currency transactions.

KEB Hana Bank regarded Chung as a non-resident of Korea in issuing the standby credit. But the bank was alleged to have neglected a duty when issuing the document, as it exempted Chung from submitting requirements such as proof of obtaining offshore real estate loans.

The act led to suspicions that KEB Hana Bank had violated the Foreign Exchange Transactions Act. Prosecutors on Sunday, however, said KEB Hana Bank “did not fail in its duty,” as a document by the Bank of Korea and a copy of the document from Chung‘s office in Germany could be seen as valid to prove that Chung was a non-resident.

“It is hard to say KEB Hana Bank failed to have abided by a mandate to verify Chung‘s status,” a source from prosecutors’ office told a local daily Money Today.

This came a few days after the Financial Supervisory Service, financial watchdog, cleared KEB Hana Bank of suspicions of failure in its duty in approving loans worth a combined 2.2 billion won ($2 million) to i-KAIST. i-Kaist is a startup devoted to education consulting business, but its founder is behind bars on charges of colluding to the Park administration.

Meanwhile, the FSS on Monday embarked on a probe on whether Kim Jung-tai, chairman of the bank‘s parent company Hana Financial Group, had meddled in a process of promoting a certain employee. Kim is currently serving a third three-year term since January 2018.

(consnow@heraldcorp.com)