South Korean and Japanese financial authorities have begun a joint investigation on suspected irregularities at Kookmin Bank’s overseas unit in Tokyo, the latest effort by the regulator here to clamp down on corruption involving financial companies, watchdog officials said Monday.

The Seoul-based Financial Supervisory Service and the Financial Services Agency in Japan have agreed to work together on the alleged slush fund operations at the Kookmin Bank’s Tokyo branch, according to FSS officials.

The branch office of South Korea’s leading bank has been under heavy scrutiny by the regulator and prosecution for suspected money laundering and stashing away slush funds for executives at its parent firm KB Financial Group Inc.

The joint efforts come days after a ranking FSS official from Seoul made a discreet visit to the counterpart agency in Tokyo early this month to discuss the matter. He apparently handed over relevant FSS documents on the case to the FSA.

Last month, the FSS requested the prosecutors’ office here to probe the Tokyo branch manager, surnamed Lee, based on its findings that he extended illegal loans worth 200 billion won ($190.1 million) to Korean companies operating in Japan and received 2 billion won as commission fees for the loans taken out to an account made under a false name. (Yonhap News)