Woori Bank’s Indonesian subsidiary, Bank Woori Saudara, has become entangled in a letter of credit (L/C) fraud case, prompting a thorough investigation by the Indonesian Financial Services Authority (OJK), which is also looking into possible insider involvement.
On June 6 (local time), the OJK announced, “Bank Woori Saudara identified suspicious activity involving letters of credit linked to a specific client and has reported the matter. There is a possibility that internal personnel were involved, and the bank is currently assessing the potential financial impact while the investigation is ongoing.”
The case first surfaced on June 2, when Woori Bank disclosed the incident on its official website. According to the announcement, potentially fraudulent language was discovered in an L/C document submitted by a mid-sized Indonesian export company. The document was meant to serve as a payment guarantee for export proceeds.
The suspicious transaction was detected through Woori Bank’s global internal control platform during a routine data validation process. The total value of the questionable letters of credit is estimated at $78.5 million USD, with actual losses still being calculated.
Woori Bank has dispatched personnel from its global risk management team to Indonesia to assess the situation and implement measures to preserve assets and minimize losses. Bank Woori Saudara has suspended the employee(s) suspected of involvement and is conducting a detailed investigation in cooperation with an external law firm. The bank is also preparing to file a police report while negotiating with the debtors involved in the alleged fraud.
The OJK confirmed that the bank voluntarily reported the issue and initiated an internal investigation. After consultations with the bank’s management, the financial regulator launched its own probe earlier this month. If evidence of insider involvement emerges, the OJK plans to intensify the investigation.
The authority added, “During our 2023 audit, we had already warned Bank Woori Saudara about its weak internal controls and risks related to L/C transactions. We will continue to take firm action against banks with poor governance to ensure transparent and responsible financial practices.”
