Shinhan Bank Discusses Early Payment of Investment in 'Lime CI Fund'... Board Meeting Scheduled for Next Week

If Early Next Week, At the Latest Early June, Board Meeting to Discuss Advance Payment of Fund Investment

[Asia Economy Reporter Kwon Haeyoung] Shinhan Bank is considering a plan to pay some of the investment funds of Lime Asset Management's 'Lime Credit Insured (CI) Fund,' which it sold worth 270 billion KRW, to investors before recovering the fund's capital. This measure comes as the maturity of the Lime CI Fund has been arriving one after another since last month, but redemptions have been delayed, increasing investor dissatisfaction.

According to the financial sector on the 21st, Shinhan Bank will hold a board meeting as early as next week to discuss a plan to pay some of the CI Fund investment funds in advance. Shinhan Bank held a regular board meeting this morning, but it is reported that the agenda for the advance payment of CI Fund investment funds was not raised.

A Shinhan Bank official said, "The problem with the CI Fund, unlike other Lime management funds, is that the loss rate cannot be confirmed," adding, "However, from the perspective of investor protection, we are reviewing a plan to pay the investment funds in advance, and we plan to hold a board meeting by late next week or early June to discuss this."

In the case of the CI Fund sold by Shinhan Bank from April to August last year, unlike other Lime funds for which other sellers decided on advance payments, it is difficult to calculate the base price. Approximately 70% of the fund's investment went into accounts receivable, and 30% flowed into the Lime Pluto-FI D-1 and Lime Pluto-TF 1 funds, which have been revealed as distressed funds. Lime Asset Management arbitrarily placed part of the investment funds into distressed funds, expanding losses, and even the accounts receivable, which were considered normal, are currently difficult to recover immediately due to the impact of the novel coronavirus disease (COVID-19).

Shinhan Bank is also considering a plan to pay investment funds in advance beyond the compensation levels of other sellers. Previously, Lime fund sellers agreed to compensate investors in advance with 75% of the fund's valuation (fund base price at the time of compensation agreement) and 30% of the loss amount. This is reported to be about 50% when converted to fund investment amounts. However, the final proportion of advance payment of investment funds is expected to be decided after board discussions.

Previously, Shinhan Bank announced that it would repay part of the investment funds to Lime CI Fund investors in four installments from March to June. However, as accounts receivable recovery became difficult due to COVID-19, the funds have not yet been returned. Nonetheless, the accounts receivable are insured, so it is reported that there is no difficulty in normal recovery even if losses occur.

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