'Rhyme Bad Bank' Establishment Gains Momentum...Will Sanctions and Dispute Resolution Accelerate?

[Asia Economy Reporter Park Jihwan] The establishment of the 'Lime Bad Bank,' which will be responsible for asset recovery and compensation related to the Lime Asset Management funds suspended from redemption, valued at around 1.6 trillion won, is set to accelerate.

According to financial authorities on the 9th, the Financial Supervisory Service (FSS) plans to form a task force to establish a new management company (bad bank) for managing Lime funds by signing a joint business agreement on the 10th.

The initial capital of the Lime Bad Bank will be 5 billion won. Shinhan Financial Group affiliates (Shinhan Financial Investment 17.6%, Shinhan Bank 6.4%) will become the largest shareholders with a 24% stake. Woori Bank is reported to hold the second-largest stake at 20%.

The Lime Bad Bank will take over the existing non-performing Lime funds, recover assets, and discuss compensation plans for victims. After undergoing registration review as a new management company by financial authorities, the bad bank is expected to officially launch around August.

With the launch of the bad bank, the financial authorities' disciplinary procedures against Lime Asset Management are also expected to accelerate. The industry anticipates severe sanctions such as license revocation or business suspension, considering Lime Asset Management's involvement in major incidents including fraud.

The FSS Dispute Mediation Committee, established to assist victims of the Lime incident, is also expected to begin full-scale operations as early as the end of this month. Currently, the FSS has completed on-site investigations targeting management and sales companies and is conducting legal reviews on the overall Lime incident.

The FSS is reportedly set to propose a mediation plan to the Dispute Mediation Committee to refund up to 100% of the principal invested in the trade finance fund ('Pluto TF-1'). This is based on the judgment that among Lime Asset Management's various funds, this fund has effectively suffered a total loss.

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