The chief of BNK Financial Group Inc., the holding company of South Korea’s regional lenders Busan Banks and Kyongnam Bank, was arrested and taken into custody on Tuesday over allegations of stock price manipulation.

The Busan District Court on Tuesday granted a pretrial warrant to detain Sung Se-hwan, chairman of BNK Financial Group, on charges of rigging share prices.

Sung has been under prosecution probe requested by the Financial Supervisory Service (FSS) since February 24. He has been suspected of orchestrating manipulation of the company’s share price ahead of planned new share issues.

BNK Financial Group allegedly rigged its stock price by asking 10 or more mid-sized construction companies based in the southern port city Busan to buy its stocks in return for loans from its affiliated banks.

Shares of BNK Financial Group closed Wednesday at 9,050 won, down 1.31 percent or 120 won from the previous session.

By Park dong-min

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]