The financial regulator has resumed its scrutiny into Woori Bank’s Tokyo branch over its alleged illicit lending in exchange for kickbacks or the possible creation of slush funds.

The probe will continue despite the recent weeklong suspension after a former executive of the overseas branch was found dead in an apparent suicide during the inspection process, officials at the Financial Supervisory Service said Monday.

The FSS has been looking into whether former senior executives at the Tokyo branch received bribes in return for issuing loans to disqualified borrowers.

In addition, officials said they had not ruled out the possibility that the branch created slush funds for its parent Woori Financial Group or Woori Bank headquarters in Seoul.

The officials added that the FSS could seek a joint investigation with the prosecution or foreign financial regulators, if necessary, as some market insiders say that the lender may have engaged in money laundering via a third country.

Some allege the bank could have amassed funds to lobby policymakers or politicians.

“The Tokyo branch of Woori Bank holds significance in the financial market as it was the first overseas branch in Korea’s banking industry,” a commercial bank executive said.

He raised the possibility that the overall overseas operations of the local banking sector may be subject to investigation targets of the FSS should critical miscounts be revealed at the Woori unit.

The Tokyo operation has been suspected of issuing irregular loans worth 61 billion won ($58 million) in exchange for bribes from customers.

Between 2007 and 2011, the lending balance at the branch climbed from $300 million to $500 million, according to the FSS.

A week ago, a car was set on fire at a park in Yangju, Gyeonggi Province. Police said that a charred body in the car was presumably that of 57-year-old man surnamed Kim, a former manager of the Tokyo branch.

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