Hana Bank Requests Extension for Lime Fund Contract Cancellation Response Deadline... Other Financial Companies (Comprehensive)

Hana Bank Board Meeting Ends Without Decision
Careful Review Needed Until Next Board Meeting

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] Hana Bank has postponed its decision on whether to accept the Financial Supervisory Service Dispute Mediation Committee's (FSS Mediation Committee) recommendation for 100% compensation of the Lime Trade Finance Fund.

On the 21st, Hana Bank held a board meeting to discuss full compensation for the Lime Trade Finance Fund, but stated, "If we accept the FSS Mediation Committee's decision, the mediation will be established and will have the same effect as a judicial settlement. Therefore, we believe it is necessary to review the acceptance of the mediation committee's result more carefully, and we plan to request an extension of the decision deadline until the next board meeting schedule."

It is reported that the board was unable to reach a conclusion on whether to accept due to issues such as breach of trust. There is also an interpretation that reflects reluctance to have the sales companies bear all the losses concealed by the asset manager. The next board meeting is scheduled to be held after mid-next month.

Previously, on the 30th of last month, the FSS Mediation Committee held a meeting and applied Article 109 of the Civil Act, 'Contract Cancellation Due to Mistake,' to four dispute mediation applications related to the Lime Trade Finance Fund sold since November 2018, deciding on 100% compensation. This is the first recommendation for full principal compensation for investment products.

By sales company, Woori Bank leads with 65 billion KRW, followed by Shinhan Financial Investment with 42.5 billion KRW, Hana Bank with 36.4 billion KRW, Mirae Asset Daewoo with 9.1 billion KRW, and Shin Young Securities with 8.1 billion KRW, totaling 161.1 billion KRW.

The deadline for the full compensation response was the 27th of this month. As Hana Bank decided to request an extension, it is expected that other banks with board meetings scheduled this week, such as Woori Bank, will also request an extension from the FSS.

A financial industry official said, "Contract cancellation due to mistake under the law may expose executives or board members to breach of trust issues, making it difficult to fully accept the mediation committee's compensation plan."

Meanwhile, the FSS has stated that if sales companies request an extension, the deadline will be extended. Sales companies and affected customers must indicate whether they accept the mediation decision within 20 days of receiving the mediation decision document.

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