A Seoul court sentenced the chairman of a now-suspended savings bank to 12 years in prison on Tuesday for extending more than 200 billion won ($177 million) in illegal loans.

Shin Hyun-kyu, chairman of the Tomato Savings Bank, was charged last year with dereliction of duty, for incurring huge losses to the troubled bank through illegal loans.

The bank's operation was suspended by the nation's top financial regulator in September last year along with several other ailing savings banks due to management irregularities and lack of capital.

"For several years, Shin has repeatedly extended large sums of illicit loans to cover up ailing management caused by the practice of lending loans under borrowed names," Judge Seoul Beom-shik of the Seoul Central District Court said in a ruling.

"Not only does he deny his charges against him, but also he also forged financial statements, and bribed tax officials and financial regulators," the judge added.

The court also handed down six years of imprisonment to the bank's executive director, only known by his surname of Nam, for colluding with Shin in the irregularities.

In a separate ruling on Tuesday, Shin Chang-hyun, the savings bank's auditor, received six years behind bars and 215 million won in fines, for receiving kickbacks in return for influence peddling on behalf of the savings bank.

The court also sentenced a former employer of the financial regulator to three years and six months of imprisonment and 85 million in fines, for the same charge.

(Yonhap News)