A Woori Bank flag is displayed in front of the bank headquarters in Seoul, Nov. 18, while the prosecution conducted a search and seizure related to allegations of improper loan extensions involving former Woori Financial Chairman Son Tae-seung. Yonhap

The prosecution requested an arrest warrant for former Woori Financial Group Chairman Son Tae-seung, Friday, over allegations that Woori Bank — under the group — extended improper loans to Son's relatives and acquaintances while he was in office.

The Seoul Southern District Prosecutors' Office said Son faces charges of breach of trust, and upon the prosecutors' request, a Seoul court will review whether to issue the warrant on Tuesday.

In August, the Financial Supervisory Service (FSS) accused Woori Bank of extending improper loans totaling 35 billion won ($25 million) to relatives of Son between April 2020 and January this year.

Son was chief of the group from December 2018 to March 2023. Before he took over the group, the amount of loans taken out by his relatives stood at just 500 million won, but this total later went into the billions of won.

Prosecutors have since reviewed the FSS' findings and uncovered evidence of additional improper loans amounting to 7 billion won to 8 billion won. It also conducted a search and seizure at Woori Bank's headquarters this week.

The prosecution suspects Son was directly involved in approving the improper loans. He was summoned for questioning on Wednesday and Thursday, and denied most of the allegations.

So far, three individuals involved in the loan scandal have been arrested and indicted. In September, Son's brother-in-law was arrested for embezzlement and document fabrication. Two former officials of Woori Bank have also been arrested on breach of trust charges.

The scandal is also impacting Woori Bank CEO Cho Byung-kyu, who has been leading the bank since July 2023.

Although he was not directly involved in the alleged improper loan extensions, board members of Woori Financial Group reached a consensus at their regular meeting on Friday that Cho will not have his term extended.

Although the board reportedly acknowledged Cho's leadership, they concluded that replacing him after the end of his term, which expires on Dec. 31, is inevitable due to the growing impact of the improper loans scandal.

Despite not being directly implicated in the case, he faces allegations of intentionally delaying the reporting of the matter to financial regulators even after becoming aware of it. The prosecution also recently designated the CEO as a suspect in the case.

Candidates for the next CEO are expected to be announced next week. Key executives from Woori Financial Group and its subsidiaries are being cited as potential candidates.