326 Lime Dispute Resolution Applications... Over 100 Cases in Just Ten Days

[Asia Economy Reporter Kim Hyo-jin] The number of dispute resolution applications related to the suspension of redemptions of Lime Asset Management's private equity funds is rapidly increasing.

According to data analyzed by Kim Byung-wook, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, which was submitted by the Financial Supervisory Service (FSS), as of the 24th of last month, the FSS had received 326 dispute resolution applications related to Lime funds. This is an increase of 99 cases in just ten days from the 227 cases reported on the 14th of last month, when the FSS announced the interim inspection results of Lime Asset Management.

Investors who have applied for dispute resolution claim that Lime fund sellers did not properly inform them of the risk of losses, alleging fraud or incomplete sales.

The highest number of applications was against Woori Bank with 150 cases (46.0%), followed by Daishin Securities with 75 cases (23.0%), Shinhan Bank with 34 cases (10.4%), Shinhan Financial Investment with 18 cases (5.5%), and Hana Bank with 15 cases (4.6%).

The claimed damages by these investors amount to 89.6 billion KRW. Woori Bank accounts for 41.1 billion KRW, Shinhan Bank 18.2 billion KRW, Daishin Securities 17.6 billion KRW, and Shinhan Financial Investment 5.5 billion KRW.

There are 19 Lime fund sellers. As of the end of December last year, they sold a total of 173 funds worth approximately 1.6679 trillion KRW.

Among these, sales to individual customers amounted to 994.3 billion KRW, with Woori Bank selling 253.1 billion KRW, Shinhan Bank 169.7 billion KRW, and Shinhan Financial Investment 120.2 billion KRW worth of funds.

The FSS plans to start an on-site investigation early this month targeting Lime Asset Management and the sellers through a joint on-site investigation team composed mainly of the Dispute Resolution Division 2, along with related inspection departments such as the Asset Management Inspection Bureau, General Banking Inspection Bureau, and Financial Investment Inspection Bureau.

Following the policy to first investigate the trade finance funds where illegal activities have been substantially confirmed, the FSS is setting the first on-site investigation targets as Woori Bank and Hana Bank, which sold a large amount of trade finance funds, including Shinhan Financial Investment.

However, due to concerns over the spread of the novel coronavirus infection (COVID-19), the FSS is carefully considering the timing and method of starting the on-site investigation.

This is because the on-site investigation requires close contact with employees of the financial companies involved, and also involves three-party interviews with Lime Asset Management and seller staff, complainants, and private bankers (PBs).

This content was produced with the assistance of AI translation services.