Yoon Seok-heon Urges Acceptance of "100% Lime Compensation Plan"... Pressures Sellers Ahead of Decision Deadline

Mentioned at the Executive Meeting on the 25th
"Prompt Acceptance Is the Path to Mutual Growth"

Yoon Seok-heon, Governor of the Financial Supervisory Service (Photo by Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] Yoon Seok-heon, Governor of the Financial Supervisory Service (FSS), expressed on the 25th his expectation that the sales companies will accept the dispute resolution plan for "100% compensation of the Lime Trade Finance Fund." This statement came as the deadline for deciding whether to accept the plan approaches, which is interpreted as an attempt to exert some pressure on the financial companies involved.

Governor Yoon stated through a morning executive meeting, "Accepting the dispute resolution decision promptly from the customer's perspective is ultimately a path of coexistence that also helps enhance shareholder value," according to the FSS.

He also pointed out, "If customer relief is neglected and both customer and market trust are lost, the foundation of financial company management will inevitably become precarious, which must be deeply considered."

He continued, "It is time for the financial supervisory system to shift towards consumer protection in line with recent trends," urging improvements so that consumer protection efforts, such as acceptance of dispute resolution decisions by the subcommittee during consumer protection and management evaluations of financial companies, can be more importantly considered.

The FSS subcommittee decided in June to recommend 100% compensation for four dispute resolution applications related to the Lime Trade Finance Fund sold since November 2018, applying Article 109 of the Civil Act on "contract cancellation due to mistake." This is the first recommendation for full principal compensation of an investment product.

The largest sales volume of the fund was by Woori Bank at 65 billion KRW. Shinhan Financial Investment sold 42.5 billion KRW, Hana Bank 36.4 billion KRW, Mirae Asset Daewoo 9.1 billion KRW, and Shinyoung Securities 8.1 billion KRW, totaling 161.1 billion KRW. The FSS initially required the sales companies to decide on acceptance by the 27th of last month.

The sales companies requested the FSS to extend the decision deadline through their boards of directors, and the FSS accepted this, asking them to notify their acceptance decision by the 27th of this month.

The sales companies hold the position that since accepting the dispute resolution plan has the effect of a settlement in court, they need to review the acceptance decision more carefully. If they do not accept the plan, litigation is inevitable.

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