Yoon Seok-heon: "Comprehensive Survey of Private Equity Firms Reveals Cases of Self-Dealing, OEM Funds, and Predatory Finance"

[Asia Economy Reporter Park Jihwan] Yoon Seokheon, Governor of the Financial Supervisory Service, stated on the 23rd that the ongoing investigation into private fund management companies has uncovered cases of self-dealing, OEM funds, and predatory finance. OEM funds are funds created by asset management companies under orders, instructions, or requests from fund distributors such as banks and securities firms, which are prohibited under the Capital Markets Act.

Governor Yoon made these remarks during an online (non-face-to-face) briefing with the press corps. Since August this year, the financial authorities have been conducting a comprehensive investigation of about 10,000 private funds and 234 private fund management companies using a two-track strategy.

Governor Yoon said, "Out of 233 private fund management companies, investigations have been completed for 18, and we are aiming to inspect 20 by the end of the year," adding, "Although the number of inspections is still small, I think the speed will increase over time."

So far, the investigation results indicate that no large-scale damage cases have been found. Governor Yoon stated, "There have been no large-scale damage cases like Lime Asset Management and Optimus Asset Management," and added, "A separate announcement is scheduled for this week."

Governor Yoon mentioned, "Regarding the private fund investigation, 50% of the 9,430 funds have been investigated so far," and said, "Financial companies are verifying the authenticity through mutual checks, and no unusual findings have been discovered to date." He also added, "We are cooperating with related agencies aiming to complete the investigation by the first quarter of next year."

Regarding the permanent organization of the private fund investigation team, Governor Yoon said, "So far, the comprehensive investigation of private funds has been conducted through a temporary organization," and added, "We will continue with the temporary organization for the time being, but it will be difficult to maintain this until 2023. Since it is an important part of managing the public's assets, we are considering internally changing it to a regular organization."

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