The Resolution and Collection Corp. filed a damages suit Friday with the Kobe District Court against four men, including two former executives of two failed pro-Pyongyang credit cooperatives, for allegedly extending illegal loans.
The suit was lodged against Song Han Gyong, former president of the defunct Chogin Kinki Credit Cooperative; So Kyong Sik, former president of defunct Chogin Hyogo Credit Cooperative; and Lee Jong Ho and Lee Bom Rak, former chairmen of the Korean credit union association, which oversaw Chogin credit cooperatives in Japan.
RCC is demanding that the four pay about 1.04 billion yen in compensation for the damages they allegedly caused Chogin Kinki.
It is the 17th case in which RCC has sued former management of Chogin nationwide, but it is the first time it has sought damages from top officials of the now-dissolved credit union association.
According to the petition, the four made illegal withdrawals of 350 million yen each from Chogin Hyogo and Chogin Kyoto Credit Cooperative in September 1997 to cover losses from nonperforming loans held by Chogin Osaka Credit Cooperative.
Song and Lee Jong Ho are accused of illegally transferring about 344 million yen from Chogin Kinki to Chogin Aichi Credit Cooperative in July 1998.
None of the money was recoverable and RCC claims the four executed illegal loans, knowing they could not collect the money.
Chogin Kinki was established through the merger of several pro-Pyongyang credit cooperatives, including Chogin Hyogo and Chogin Kyoto.
But Chogin Kinki itself failed in December 2000. Seven people, including the four, were charged with breach of trust in connection with the illegal loan case.
Song and the two Lees are standing trial on the charge. So has already received a suspended prison term.