South Korean regulators will decide on Thursday whether to impose a stiff penalty on the head of the country’s biggest banking group, who is accused of “illegal and inappropriate” investment in exotic financial instruments.

Hwang Young-key, chairman of KB Financial Group, was under investigation for investing some $1.5bn in collateralised debt obligations and credit default swaps while head of Woori Bank from 2004 to 2007, the state-run Korea Deposit Insurance Corporation, Woori’s main investor, said.