Boss of suspended bank in 'suicide' leap from head office as customers queue on pavement below



Death: The body of Chung Ku-haeng is taken from outside the Jeil II bank

The chief executive of a South Korean savings bank jumped to his death today in an apparent suicide after the company was suspended in an illegal dealings probe.

Chung Ku-haeng hit the pavement near the head office's of Jeil 2 Savings Bank in Seoul, South Korea, as dozens of customers queued at an entrance waiting to withdraw cash.

'It was so frightening,' said Lee Mee-sook, a witness at the scene. 'I didn't know at the time it was the bank chief.'

Chung Ku-haeng's covered body was carried away by police in front of the shocked customers.

'It is true that he jumped to his death," the officer said, adding the scene had been sealed off. Television footage showed investigators covering Jeong's body with a piece of white cloth.

The apparent suicide followed a raid by prosecutors, police and bank regulators of seven savings banks including Jeil, in connection with possible irregularities by their executives and major shareholders.

'We are focusing on confiscating materials on excessive loan extensions, improper lending to shareholders and unhealthy loans, which the banks were accused of issuing,' an unnamed investigator said.

Prosecutors who raided the bank seized accounting books, transaction statements and computer hard disks, it is said.

Financial regulators at the weekend suspended the seven banks for six months because of their poor financial condition caused by reckless investment in risky property projects.

So far this year 16 savings banks have been suspended for inadequate liquidity after the financing of soured real-estate projects.

The suspensions have left the sector reeling from falling financial credibility as its asset quality deteriorates.

Financial district: Seven banks in South Korea, pictured, have been suspended after probes were launched into reckless investment in risky property projects

The crisis has caused thousands of customers to converge on banks' head offices and branches of the lenders hoping to withdraw their money.

National deposit insurance covers customers for only up to 50 million won (£27,400) in principal and interest, leaving many depositors at the risk of losing their investments if any of the banks go into receivership.

A combined 595 billion won in deposits had been withdrawn from 91 savings banks between Monday and Friday, according to the regulatory Financial Supervisory Service.

The pace of withdrawals slowed sharply since the start of business on Monday but Friday was the fifth straight day of customers lining up to get their money back.

The country's prosecution has set up a special team of investigators to probe mismanagement and allegations of corruption at the seven savings banks.

A corruption scandal at Busan Savings Bank earlier this year claimed some of Lee's closest aides as prosecutors' probe of a lobbyist's alleged illegal payoffs to top government officials expanded.

Lee's chief public affairs secretary was summoned by the prosecutors this week under graft allegations, after he tendered his resignation last week.