Speed of Lime Dispute Mediation Work... Expected to Conclude by January Next Year

[Image source=Yonhap News]

[Asia Economy Reporter Koo Eun-mo] The Financial Supervisory Service (FSS) has begun to accelerate efforts to mediate disputes related to Lime Asset Management's private equity funds (PEFs) whose losses have not yet been confirmed. The FSS plans to complete dispute mediation for customers affected by PEFs sold by KB Securities and Woori Bank by January next year at the latest.

According to financial authorities on the 7th, the FSS has completed on-site investigations, including tripartite meetings, for dispute mediation concerning the unconfirmed loss Lime PEFs sold by KB Securities and Woori Bank. Going forward, the FSS plans to prepare a dispute mediation proposal after legal consultations regarding the liability of the sellers and the compensation ratio. The FSS expects that if the legal review is completed quickly and there are no contentious issues, dispute mediation could be finalized within this year, with a conclusion expected by January next year at the latest.

In October, the FSS announced its policy to proceed with post-settlement dispute mediation based on estimated losses even if the losses related to PEF investments have not been confirmed. This is to address concerns that compensation for damages could be delayed because losses must be confirmed through redemption or liquidation of the fund before compensation is possible. Currently, except for the Lime Asset Management trade finance fund (Pluto TF-1), which has undergone dispute mediation, other funds have unconfirmed losses, delaying victim relief.

According to the FSS policy, dispute mediation based on estimated losses applies when facts are verified through inspections of the asset manager or sellers and objective loss estimation is possible through asset due diligence. Based on the estimated loss amount, a mediation decision is made to provide advance compensation to victims, with additional recoveries decided afterward.

The first targeted funds are 'Lime AI Star 1.5Y Professional Investment-type Private Investment Trust Nos. 1 to 3' sold by KB Securities and 'Lime Pluto FI and Lime Thetis No. 2' sold by Woori Bank. The FSS is reportedly conducting dispute mediation for unconfirmed loss Lime funds by referring to the dispute resolution method used by the Korea Development Bank (KDB). KDB completed most compensation procedures for Lime fund victims through court-mediated settlements, with investors receiving 40-80% of their losses compensated. The FSS expects that this compensation standard will also apply to the cases of KB Securities and Woori Bank, proposing a dispute mediation plan that compensates at least 40% of the losses.

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