Two employees of Kookmin Bank's unit in Tokyo have been indicted on charges of extending illegal loans worth 400 billion won (US$380 million) to Korean companies operating in Japan, state prosecutors said Sunday.

The Tokyo branch of South Korea's leading bank has been investigated by prosecutors over suspicions that it lent more than permitted to Japan-based firms to secure returns used to amass massive slush funds.

The suspects, including a 57-year-old former Tokyo branch manager only identified by his surname Lee, are under suspicion of playing a leading role in granting unauthorized loans in return for kickbacks between 2007 and January 2013, prosecutors said.

The Seoul Central District Prosecutors' Office said the suspects allegedly forged loan application documents and overvalued collateral in order to grant massive loans to business groups.

"The prosecution has secured a partial evidence that there were kickbacks in exchange for the illegal lending," an investigator said. "We are focusing on finding out where that money went."

The prosecution office said it is cooperating with Japanese law enforcement and financial authorities to further investigate the alleged slush funds amassed by the branch and whether Lee hid assets under a borrowed-name account. (Yonhap news)