NH Securities' Up to 70% Advance Support Sparks Backlash from Optimus Investors

NH Investment & Securities "Investor Support"... Affected Investors Say "It's Basically an Interest-Free Loan"

Victims of the Optimus Fund NH Investment & Securities held a protest rally on the 20th of last month in front of the National Agricultural Cooperative Federation in Jung-gu, Seoul, demanding compensation for damages caused by the Optimus Fund. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kum Boryeong] NH Investment & Securities has decided to provide up to 70% advance support to Optimus Fund investors, which is being evaluated as a compromise between investor support and shareholder value protection. However, affected investors have opposed the decision, saying it is "only called advance support but is ultimately an interest-free loan."

NH Investment & Securities announced on the 28th that it held an emergency board meeting on the morning of the 27th and resolved to provide emergency liquidity funds in advance to Optimus Fund investors. For individuals, 70% support is provided if the investment amount is 300 million KRW or less, 50% if less than 1 billion KRW, and 40% if 1 billion KRW or more. For corporations, the same ratio as individuals applies if the investment amount is less than 1 billion KRW, but 30% support will be provided if it is 1 billion KRW or more. The distribution ratio of customers' investment amounts, each customer's financial situation, and asset status were taken into consideration.

The market analyzes that NH Investment & Securities has presented a compromise between customer protection and shareholder value enhancement. A financial investment industry official explained, "From the customer's perspective, since the maturity is fixed and there must be a set plan, the redemption delay could cause opportunity costs, so this advance support could be useful."

NH Investment & Securities also stated that the decision was made after much deliberation. Since the emergency board meeting on June 25, NH Investment & Securities has held a total of six board meetings. An NH Investment & Securities official said, "There were difficulties in finding common ground within the board, but we finally reached a conclusion," adding, "The resolution of this agenda is a measure to fulfill moral responsibility as a distributor."

Optimus Fund investors are not welcoming this decision. This is because it is completely different from Korea Investment & Securities' 70% advance payment. Following NH Investment & Securities, Korea Investment & Securities, which has the second-largest number of individual Optimus Fund investors, announced an unconditional 70% advance payment plan last month. Korea Investment & Securities plans to treat the 70% advance payment amount as a loss even if the financial authorities conclude that the distributor is not responsible. In this case, NH Investment & Securities can recover the advance support amount.

A member of the Emergency Countermeasure Committee for Optimus Fund Victims claimed, "Although it is called advance support, it is equivalent to providing an interest-free loan," and added, "The differential support also seems like it might be intended to cause internal division." Optimus Fund investors are contacting several law firms for legal action.

NH Investment & Securities, as the largest distributor of the Optimus Fund, has sold 35 Optimus Funds totaling 432.7 billion KRW. The number of individual accounts is 884 (209.2 billion KRW), and the number of corporate accounts is 168 (223.5 billion KRW).

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