Prosecutors Arrest KB Securities Team Leader for Deliberate Concealment of Lime Fund Deficiencies

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Byung-don] Kim, a team leader at KB Securities suspected of assisting in the sale and receiving compensation despite knowing the Lime Asset Management fund was insolvent, has been arrested.

The Seoul Southern District Prosecutors' Office Criminal Division 6 (Chief Prosecutor Kim Rak-hyun), which is investigating the Lime case, announced on the 10th that Kim, team leader of KB Securities' Delta One Solutions Department, was detained on charges of violating the Capital Markets Act. The Seoul Southern District Court issued an arrest warrant for Kim on the 6th, citing concerns that he might destroy evidence or flee.

KB Securities, the distributor of the Lime fund and the securities firm that provided total return swap (TRS) loans to Lime Asset Management, is understood by prosecutors to have sold the fund to investors despite knowing its insolvency during the process of extending credit to Lime through TRS, a type of secured loan contract.

The prosecution is also investigating seven KB Securities executives and employees, including Kim, on charges of deliberately concealing the insolvency of the Lime fund.

Meanwhile, last October, prosecutors conducted a search and seizure at KB Securities' headquarters in Yeouido, Seoul, securing materials related to the incomplete sales and mismanagement of the Lime fund. KB Securities denies the allegations, claiming they were not aware of the fund's insolvency in advance.

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