Shinhan Financial Group chairman Ra Eung-chan is expected to resign in the coming weeks amid mounting corruption allegations, most recently one involving his son, observers said Monday.

A lawmaker raised suspicion that Ra’s second son, who once worked for a Shinhan unit, may have appropriated company funds for his investment in a property development company.

Ra’s son has held a 49 percent stake in the company involved in an urban redevelopment in Seoul.

Rep. Cho Young-taik of the Democratic Party questioned how the former salaried worker in his early 40s mobilized funds amounting to about 20 billion won ($17.8 million).

“It is speculated that some of the company funds could have been used for the (property) investment,” Cho said during the parliamentary audit on financial regulators on Friday.

Ra has been under investigation for alleged violation of the real-name account laws.

The Shinhan chairman, who has participated in the group’s IR sessions in the U.S., Europe and Asia since early October, returned home on Monday.

It is speculated that he could resign before the Financial Supervisory Service reprimands him.

Ahead of the FSS panel discussion, tentatively slated for Nov. 4, board members of Shinhan Financial are scheduled to convene an extra meeting on Oct. 30.

The board is expected to discuss the fate of the top three Shinhan executives including Ra. The other two is group president Shin Sang-hoon and Shinhan Bank CEO Lee Baek-soon, both of which also allegedly engaged in irregularities.

Over the weekend, Ra met with the group’s influential shareholders in Japan in a reported bid to exchange views about his fate and the candidates for the next chairman.

Ra, who had been summoned by lawmakers as a witness, did not attend the National Assembly’s audit on the FSS and the Financial Services Commission last Friday.

Meanwhile, the FSS has launched a two-month-long inquiry into Shinhan Financial dogged by allegations of illegal bank transactions and misappropriation involving three top executives.

As part of its ongoing probe, the FSS plans to dispatch inspectors to headquarters of the group in downtown Seoul from Nov. 8.

Before Nov. 8, the group has to submit written form of internal documents including financial statements to the watchdog.

By Kim Yon-se (kys@heraldcorp.com)