Popfunding Fund Victims File Criminal Complaints Against Korea Investment & Asset Management Company

[Asia Economy Reporter Koh Hyung-kwang] Financial companies that sold private equity funds linked to peer-to-peer (P2P) lending company 'Popfunding', including Korea Investment & Securities, have become embroiled in lawsuits over allegations of incomplete sales. This follows investors who suffered losses due to the suspension of redemptions of Popfunding-linked funds submitting complaints on the 29th.

The 'Korea Investment & Securities Jarvis Popfunding & Hastings Popfunding Redemption Delay Victims Countermeasure Committee' held a press conference in front of the Seoul Southern District Prosecutors' Office on the morning of the same day and announced that they had submitted complaints to the prosecution against six officials from Korea Investment & Securities, Jarvis Asset Management, Hastings Asset Management, and other companies involved in selling Popfunding funds. The charges include violations of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (fraud), and the Capital Markets Act (unfair trading practices and improper solicitation). Law firm Hannuri is representing 89 affected investors in the criminal complaint.

According to the committee, the complainants stated that Popfunding funds sold through Korea Investment & Securities from June to November last year were scheduled for sequential maturity repayments starting January this year, but due to suspension or expected suspension of redemptions, they suffered losses amounting to approximately 50 billion KRW.

The victims claim that some borrower lists (home shopping product suppliers) and past loan and repayment histories of the loan receivables explained in the investment proposals during the sale of Popfunding funds were false. Before the establishment of Jarvis Fund No. 5, Popfunding was defrauded of about 27 billion KRW in loans, and to conceal this fact, they designed Popfunding funds such as Jarvis 5 and 6 through so-called 'rolling over' schemes.

Popfunding is a company that mainly provides movable collateral loans to small and medium-sized enterprises such as home shopping or open market sellers. The structure involves lending investors' funds secured by movable assets such as inventory assets of these SMEs. Since 2018, Korea Investment & Securities has sold Popfunding funds operated in connection with Popfunding by Jarvis and Hastings. However, as repayments from some companies were delayed, repayments of about 35.5 billion KRW in total investment funds, including Jarvis Popfunding Home Shopping Vendor Fund No. 5, were postponed.

On this day, the victims also claimed that the delinquency rate of Popfunding loans stated in the investment proposal was manipulated in light of circumstances where hundreds of billions of KRW in loan delinquencies had already occurred as of May last year. They further explained that due to non-performing loans and embezzlement of collateral, the level of collateral secured was not as explained at the time of fund subscription.

The victims urged, "Korea Investment & Securities and asset management companies Jarvis Asset Management and Hastings Asset Management, which were deeply involved in the design, issuance, and operation of Popfunding funds, may have conspired in criminal acts or knowingly aided and abetted them," adding, "We have filed complaints to seek the prosecution's help in uncovering the truth and proving fraud and contractual mistakes," calling for a swift investigation.

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