Rhyme Core Arrest... When Will the Funds Be Recovered?

Compensation Increases with Conspiracy Circumstances... Difficult to Gauge Due to Lack of Repayment Ability

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] Attention is focused on whether the recovery of individual investors' funds will accelerate as key figures in the 'Lime Asset Management Scandal,' which caused the suspension of redemptions for funds worth 1.7 trillion won, including former Vice President Lee Jongpil and former Star Mobility Chairman Kim Bonghyun, have been apprehended. If the prosecution's investigation of key suspects reveals evidence of collusion between Lime Asset Management and sales companies in incomplete sales, it is expected to have a significant impact on investor compensation.

According to the financial investment industry on the 27th, the funds suspended from redemption by Lime Asset Management last year totaled 1.6679 trillion won, consisting of 4 mother funds and 173 sub-funds. So far, losses exceeding 1 trillion won have occurred only in the Pluto FI D-1 Fund (Pluto) and Thetis No. 2 Fund (Thetis) among the mother funds. The other two mother funds, Trade Finance and Credit Insured Funds, also have major assets overseas, making it difficult to estimate how much can be recovered.

As difficulties are expected in handling the suspended redemption funds, sales companies are promoting asset recovery by establishing a 'bad bank' to take over Lime Asset Management funds. However, some fund sales companies have expressed reluctance to participate, citing that specific plans such as investment ratios or amounts have not been decided, causing delays in the establishment schedule.

Aside from the recovery amount through the bad bank, the remaining investment funds will be recovered through dispute resolution procedures by financial authorities or legal lawsuits. Currently, more than 500 dispute resolution requests have been filed with the Financial Supervisory Service against sales companies. In future dispute resolutions or lawsuits, the compensation ratio will vary significantly depending on evidence of collusion between Lime and the sales companies. If the prosecution's investigation proves fraud charges against Lime based on statements from former Vice President Lee and others, the relevant contracts can be canceled civilly, making legal recovery of investment funds possible. However, the problem is that Lime has almost no ability to repay.

The path for investor compensation through sales companies has widened. If concrete evidence of collusion with sales companies regarding Lime's poor asset management, investment situation, fraud, or incomplete sales is revealed, compensation for Lime investors is expected to increase. A financial authority official explained, "The issue of investor compensation against sales companies can vary greatly depending on evidence of collusion with Lime."

Attorney Koo Hyunju of Hannuri Law Firm said, "If the statements of the key suspects apprehended this time clarify where the investment assets flowed and how they were used in criminal activities, it will help in understanding the status of investment funds," adding, "If it is revealed how sales companies or total return swap (TRS) traders were involved in Lime's illegal activities, it will help investors receive compensation through claims for unjust enrichment recovery and incomplete sales damages against sales companies, etc."

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