Financial Authorities Discuss Plan for Comprehensive Private Equity Fund Survey This Week

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[Asia Economy Reporter Koh Hyung-kwang] Amid the recent large-scale suspension of private equity fund redemptions, financial authorities will hold a joint inspection meeting this week to discuss plans for a full survey of over 10,000 private equity funds. A "four-party cross-check" verifying whether the asset details recorded by fund management companies, distributors, custodians, and administrative service companies match is expected to be prioritized.

According to financial authorities on the 28th, the Financial Services Commission and the Financial Supervisory Service will hold a joint inspection meeting this week with related organizations to discuss the method and schedule for the full survey of private equity funds.

Optimus Asset Management is suspected of operating private equity funds by collecting investment funds from about 1,000 investors over the past 2-3 years under the pretext of investing in public institution sales receivables, but in reality investing in loan companies, insolvent firms, and real estate, and engaging in a Ponzi scheme.

The damage scale, where neither investment returns nor principal have been repaid so far, is about 100 billion KRW. Since most of the Optimus funds that have not yet matured are also expected to suspend redemptions going forward, there are projections that the damage could increase up to 500 billion KRW.

In response, Financial Services Commission Chairman Eun Sung-soo stated on the 23rd, "In past investigations, only documents submitted by management companies were reviewed, but in cases like Optimus, it is necessary to compare with actual assets," and added, "Previously, only 52 companies were investigated, but if possible, even if it takes 10 years, I hope to investigate all," revealing plans for a full survey.

He also said, "The private equity fund market needs to be examined once for the overall development of the capital market," and added, "If trust in private equity funds collapses, trust in the entire capital market collapses, so even if it takes time, everything must be inspected."

Since this is a large-scale investigation targeting about 230 specialized private equity management companies, financial authorities are expected to prioritize the "four-party cross-check." This involves verifying whether the asset details and document contents of over 10,000 funds match among management companies, distributors, custodians, and administrative service companies. During this cross-check process, on-site inspections are expected to be conducted on management companies where asset discrepancies are found.

As the Financial Supervisory Service's Asset Management Inspection Division, responsible for on-site inspections of asset management companies, has limited personnel, plans to receive manpower support from related organizations with inspection functions such as the Korea Exchange and the Korea Deposit Insurance Corporation are also under consideration.

Meanwhile, financial authorities conducted a reality check on 52 companies and 1,786 private equity funds from November last year to January this year. However, that reality check was conducted through a document survey method and did not cover all private equity funds.

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