Prosecutors confiscate evidence from Woori Bank headquarters in Seoul, Aug. 27, in connection to allegations of huge inappropriate loans extended to relatives of Son Tae-seung, former chairman of Woori Financial Group. Yonhap

Tension is rising in the financial sector with the first parliamentary inspection under the 22nd National Assembly approaching. Given a series of controversial incidents surrounding the industry, there is a strong possibility that major figures, including chairmen of financial groups, will be asked to appear at the inspection sessions.

Particular attention is being drawn to Woori Financial Group, which has been at the center of controversy over huge inappropriate loans extended to relatives of its former chief.

The Assembly's National Policy Committee, which is in charge of financial matters, plans to finalize a list of figures to be brought to the inspection sessions by the end of this month. The schedule is set to begin on Oct. 10, starting with institutions such as the Financial Services Commission (FSC) and the Korea Deposit Insurance Corp.

Key issues expected to be addressed this year include Woori Bank's loan scandal, the liquidity crisis involving TMON and WeMakePrice, the sharp growth of household loans and the implementation of a financial investment income tax.

Attention is particularly centered on whether Woori Financial Chairman Yim Jong-yong will attend. In August, Yim made a public apology and acknowledged holes in his firm's internal control system after the Financial Supervisory Service (FSS) found that Woori Bank gave loans worth 61.6 billion won ($46 million) from April 3, 2020, to Jan. 16 this year to relatives and associates of former Chairman Son Tae-seung.

Woori Financial Chairman Yim Jong-yong speaks during a meeting with analysts at Woori Investment Securities' headquarters in Seoul, Aug. 11. Courtesy of Woori Bank

FSC Chairman Kim Byoung-hwan said during a press conference on Sept. 12 that he has “very serious concerns regarding this matter.”

Given the gravity of the issue and the intense focus from both financial authorities and the political sphere, it is believed that it will be difficult for Yim to refuse the request to appear before the Assembly this time.

TMON and WeMakePrice's massive cash crunch, which caused delays in payments to vendors and refunds to customers, is also expected to be a key issue.

In July, the suspension of settlements by the two Korean affiliates of Singapore-based e-commerce platform Qoo10 led to significant losses for numerous sellers and consumers. The damage is estimated to be around 1.4 trillion won, according to the government data.

The supervisory responsibilities of the FSC and the FSS in relation to this matter are also expected to be addressed.

Additionally, heated debates are expected over the growth of household debt, as loans across all financial institutions increased by 9.8 trillion won in August compared to the previous month. This marks the largest increase in three years since August 2021, prompting concerns that the rising debt poses a threat to economic growth.

Rival parties are also expected to deal with a financial investment income tax that is set to take effect next year, with the government calling for scrapping such a tax scheme to ease market uncertainty and help boost the stock market.