Kim Jaehyun, CEO of Optimus, First Trial... Prosecutors Say "Overall Investment Management"

CEO Kim's First Appearance After Indictment
Prosecutors Define Scope of Conspiracy Using PPT

Defendant Denies Some Charges
"Unrelated to Political Corruption Trial" Claim

[Image source=Yonhap News]

[Asia Economy Reporter Seongpil Jo] The trial of the key figures responsible for the Optimus Asset Management scandal officially began on the 16th. As the incident evolved into a power-related gate, new facts have been emerging one after another, but the court decided that it was necessary to conduct a focused hearing separate from the prosecution's investigation and held the first trial session as scheduled on this day.

The Seoul Central District Court Criminal Division 34 (Presiding Judge Heo Seon-ah) held the first formal trial for five defendants, including Kim Jae-hyun, CEO of Optimus Asset Management, who was indicted on charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (fraud). Kim, who had not appeared at the two previous preparatory hearings, appeared for the first time since being detained and indicted. Yoon, a lawyer who is the husband of an administrative officer at the Blue House and an inside director, and Lee, the second-largest shareholder, had all appeared at the preparatory hearings where defendants were not required to attend.

As the trial began, the prosecution displayed a pre-prepared PowerPoint (PPT) file on the courtroom screen. They explained the charges against Kim and others clearly by going through the PPT slides. The prosecution first defined the scope of their conspiracy. They claimed that the defendants created a fund by deceiving investors into believing they were investing in 'public institution accounts receivable,' but in reality, they concentrated investments in insolvent companies and used new fund repayments to cover previous ones, each playing a specific role. The prosecution stated, "Kim was in charge of overall investment, explaining the product to securities firms to attract investments." Regarding Lee, they said, "He used his position as an inside director to make it appear as if he lawfully acquired confirmed accounts receivable and withdrew acquisition funds to provide to individual investors." They also defined, "Lawyer Yoon was responsible for reviewing legal documents and handling disputes."

The prosecution's initial explanation of the scope of accomplices was interpreted as a response to the court's statement at a previous hearing that "the key issue is who designed and led the fund fraud among those grouped as accomplices." At that time, Kim and others tried to shift responsibility onto each other. Kim claimed, "I was deceived by Lawyer Yoon," while Yoon and others insisted, "Kim led the fraud and lobbying." The court also devoted considerable time during this hearing to grouping the scope of conspiracy by the timing of the crimes.

[Image source=Yonhap News]

On the other hand, Kim and others denied some of the charges. Kim's side admitted to crimes committed after January 2019 but denied earlier allegations. They took a similar stance regarding the charge of forgery of private documents. Lee denied all charges except for admitting to embezzlement. The remaining three, including Yoon, also stated they would contest some of the charges.

Near the end of the trial, Kim's side also addressed recent allegations of lobbying involving political and business circles. He said, "This trial is unrelated to the lobbying allegations involving political and business circles," and added, "The defendant will sincerely cooperate with the investigation within the scope of the right to defense." However, he expressed concern that "before the truth is revealed in open court, the defendant is being reported as if involved in lobbying and responsible, which harms the right to defense," and requested, "I hope no misunderstandings arise in court that would interfere with the defendant's right to defense." The court responded, "Since this is unrelated to the direct charges, we are not concerned," and assured, "There is no need to worry about the court having any preconceived notions."

Kim and others were indicted on charges of raising 1.5 trillion won from about 2,900 investors from April 2018 to June this year by claiming to invest in public institution accounts receivable, then using the funds for acquiring bad debts and Ponzi-like fund repayments. They are also suspected of conducting extensive lobbying in political and financial circles to cover up various illegal transactions. Currently, separate from the trial, the prosecution is expanding the investigation into the political and business circles to uncover the background that allowed Kim to carry out such a large-scale fund fraud.

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