It was in October 2019 that Lime Asset Management stopped repurchasing KRW 1.6 trillion. The Financial Supervisory Service conducted the inspection in August of that year and announced the results the following year.
However, last month, after four years, the Financial Supervisory Service again announced the results of the Lime Fund inspection, and this time sparks in the political world.
The Financial Supervisory Service announced that some investors received preferential treatment and repurchased the Lime Asset Management Fund before the suspension of redemption, because among them, Democratic Party lawmaker Kim Sang-hee was included.
Let’s take a look at the allegations of preferential redemption of the Lime Fund, which have resurfaced in four years.
FSS “Preferential repurchase, reasonable doubts”
It was on the 24th of last month that the Financial Supervisory Service announced additional inspection results for Lime Asset Management.
The key to the announcement is that from a month or two ago in October 2019, when the redemption suspension of the Lime Fund broke out, the manager gave preferential redemption to some investors.
Press release on the results of the inspection of the ‘Inspection TF for Managers Damaged by Major Investors’ released by the Financial Supervisory Service on August 24
The Financial Supervisory Service pointed out that investors who received preferential redemption included some influential figures such as the OO Central Association (20 billion won), listed company OO (5 billion won), and multiple members of the National Assembly (200 million won). Later, Democratic Party lawmaker Kim Sang-hee was nominated as the member of the National Assembly.
The Financial Supervisory Service revealed that only 4 of Lime’s 60 open-ended funds were redeemed in an illegal way, such as blocking the fund.
These four funds had insolvent assets, so normal redemption was impossible at the time, and for this reason, the FSS explained that there was no choice but to raise ‘reasonable suspicion’ that preferential treatment was provided.
Kim Sang-hee “I only bought it back because I was recommended”
Representative Kim Sang-hee held a press conference and strongly refuted that it was groundless.
Rep. Kim Sang-hee visiting the Financial Supervisory Service on August 25 and protesting
I invested in the Lime Matisse Fund No. 4 at the suggestion of Mirae Asset Securities, but at the end of August 2019, Mirae Asset recommended a redemption and insisted that I only followed it.
He also explained that he had invested about 200 million won and suffered a loss of about 36 million won.
Rep. Kim criticized, “The Financial Supervisory Service is maliciously using the anger and bloody tears of the victims of the Lime Incident for the general election next year, and it is an abuse of power using the Financial Supervisory Service, the spread of false information, and defamation.”
■ How far can you take it as a problem?
As the Financial Supervisory Service confirmed the flow of funds at the time through inspection, it is highly likely that illegal redemption took place in a way such as blocking the actual fund rotation.
However, many experts are of the opinion that it is only possible to hold Lime Asset Management responsible for redempting funds by illegally managing funds, and that it is difficult to hold investors accountable.
If the fund seller, Mirae Asset Securities, etc., read media reports and recognized that Lime Asset Management’s situation was difficult, and recommended Rep. Kim and others to repurchase, it is difficult to hold even Mirae Asset Securities accountable.
Currently, the Financial Supervisory Service recommended investors at the time for redemption, and began inspections of Mirae Asset Securities and others to see if the redemption had taken place.
It could be a problem if Mirae Asset Securities recognized the insolvency of Lime Asset Management through illegal channels, or if the circumstances of illegally ordering unreasonable redemption were detected.
It is also a part to look at whether Mirae Asset Securities responded systematically at the company level and instructed redemption of only some funds.
However, even if this problem is revealed, it is difficult to hold the responsibility for preferential redemption right away to investors such as Representative Kim Sang-hee.
Experts are of the opinion that Congressman Kim can be seen as having received a ‘preferential redemption’ only when the situation in which he was aware of the Lime Fund’s insolvency in advance and actively requested a redemption was revealed.
■What happened in September 2019?
To determine whether this is indeed a preferential repurchase, we also need to look at what the atmosphere was like at the time.
This is because it may be difficult to take issue with the demand for redemption from sellers or investors such as Mirae Asset Securities if media reports such as ‘The Lime Fund is unstable’ came out in advance.
It was in October 2019 that Lime Asset Management announced the suspension of redemption, but it was in July 2019, three months earlier, that concerns about insolvency came out.
At the time, there were media reports that the prosecution was investigating Lime Asset Management for the use of undisclosed information, and a search and seizure was also conducted.
Suspicion was also raised that it was illegally managing the fund’s yield by exchanging convertible bonds (CB) of KOSDAQ companies in an expedient way.
Perhaps because of these suspicions, in September 2019, a total of 31 Lime Asset Management funds (open-ended) were redeemed for 306.9 billion won. It can be seen that quite a few people already knew that there was a problem with Lime Asset Management.
However, even if the media identified Lime Asset Management’s insolvency and requested redemption, it could be a problem if an illegal request or order was made for redemption of the fund.
In the end, it seems to be revealed through the prosecution’s investigation
Democratic Party lawmakers, including Congressman Kim, claim that Lee Bok-hyun, a former prosecutor called the so-called ‘Seok-Yeol Yoon Division’, used the Financial Supervisory Service in a political offensive toward the Democratic Party.
Some employees of the Financial Supervisory Service are also criticizing the announcement of the test results through the anonymous community ‘blind’. This is the content of the geumgam-won has become a tool of politics.
Capture posts and comments posted on the Financial Supervisory Service’s anonymous community (blind)
The prosecution has been moving quickly since the announcement of the FSS inspection results on the 24th of last month.
Within a week of securing relevant data, we launched a compulsory investigation by seizing and searching for fund sellers suspected of preferential redemption, such as Mirae Asset Securities.
In the end, it was inevitable that the prosecution’s investigation would cover whether the preferential repurchase was correct and whether the people who received the repurchase were involved in the process.
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2023-09-02 04:00:00
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