NH Investment & Securities Ignites 'Joint Responsibility' Debate in Optimus Scandal

President Jung Young-chae Mentions at First Meeting with Victims... Korea Securities Depository Union Immediately Protests
Victims Express Dissatisfaction, "Trying to Involve Themselves in the Fight Against Hana Bank and Korea Securities Depository"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] As the suspension of redemptions for funds worth up to 500 billion won becomes a reality, the issue of joint responsibility among the fund management affiliates involved in the Optimus scandal has surfaced. This came up when Jung Young-chae, CEO of NH Investment & Securities, the largest distributor and central figure in this incident, mentioned the responsibilities of custodians such as Hana Bank and the Korea Securities Depository (KSD) during his first meeting with victims of the Optimus fund. Hana Bank and KSD have drawn a line, stating that this is not a matter for discussion at this time, while investors expressed frustration, feeling that they are being dragged into a dispute between institutions with no direct connection to them.

According to the financial investment industry on the 7th, eight emergency committee members of the 'Optimus Fund Fraud Victims Association' met with CEO Jung and related department executives at NH Investment & Securities headquarters from 10 a.m. the previous day. The emergency committee demanded support measures beyond liquidity assistance and compensation plans from other companies. Previously, Korea Investment & Securities decided to prepay 70% of the principal to customers who subscribed to the Optimus fund. However, on this day, the emergency committee and NH Investment & Securities could not narrow their differences regarding liquidity support measures.

It is reported that CEO Jung stated that custodians such as Hana Bank and the Korea Securities Depository, which acts as the administrative custodian, also bear responsibility. According to the emergency committee, Jung explained that "the Financial Supervisory Service's investigation found negligence on the part of Hana Bank and KSD, and legal responsibility should be imposed on them to secure a high liquidity supply ratio for the victims." Jung’s remarks appear to stem from concerns that the 50% prepayment plan realistically proposed by NH could only increase backlash from victims. Since it is difficult to propose a prepayment plan exceeding 70% due to issues such as breach of fiduciary duty among board members, emphasizing the responsibility of these two institutions seems intended to raise the compensation ratio.

The sudden emergence of the joint responsibility theory was immediately opposed by the KSD labor union. The union stated, "No calculation agency prepares fund asset statements under its own name, nor do they actually issue them externally, including to distributors," and added, "The distributor’s claim that they recommended investments to investors based on fund asset statements prepared by KSD cannot be established." Hana Bank also dismissed the claims, saying, "All discussions are only possible after the financial authorities’ investigation results are out, and the joint responsibility issue is merely a unilateral claim by NH Investment."

Victims of the Optimus fund said, "We do not understand why Hana Bank and KSD, which we never heard of when subscribing to the product, are being targeted in compensation issues with investors," and criticized, "It sounds like they are asking victims to join them in fighting against these institutions, as if they themselves are victims."

A securities industry official said, "From the customers’ perspective, it seems they are demanding responsibility from custodians as well to maximize recovery amounts and minimize the legal burden on distributors."

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