Discovery Sales Company Industrial Bank Subcommittee Meeting to Be Held at the End of This Month
Germany Heritage and Italy Healthcare Fund Also Proceeding Sequentially
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[Asia Economy Reporter Kim Jin-ho] The Financial Supervisory Service (FSS) will hold a Dispute Mediation Committee (DMC) meeting for the Discovery Fund sales company, Industrial Bank of Korea (IBK), at the end of this month.
According to the financial sector on the 12th, the FSS plans to hold the DMC related to the Discovery Fund after conducting on-site investigations before the end of this month. Subsequently, the German Heritage Fund and the Italian Healthcare Fund will also be brought to the DMC sequentially by next month.
The Discovery Fund was mainly sold by IBK. From 2017 to 2019, IBK sold Discovery US Fintech Global Bond Fund and Discovery US Real Estate Senior Bond Fund worth 361.2 billion KRW and 318 billion KRW, respectively.
Due to the US asset manager's failure to recover the bonds invested with the fund's capital, the current delayed redemption amounts are approximately 69.5 billion KRW and 21.9 billion KRW, respectively.
In February, the FSS held a disciplinary committee and imposed sanctions on IBK for responsibility in selling the defective funds, recommending a one-month partial suspension of business and a fine to the Financial Services Commission. Kim Do-jin, the former IBK president at the time of the fund sales, received a sanction equivalent to a cautionary warning.
After the dispute mediation for the Discovery Fund concludes, the DMC meetings for the Heritage Fund (Shinhan Financial Investment, fund size 520.9 billion KRW) and the Healthcare Fund (Hana Bank, 184.9 billion KRW) are scheduled to follow.
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For the Discovery, Heritage, and Healthcare Funds, it is expected to be difficult to reach a decision for a full principal refund based on 'contract cancellation due to mistake,' as was the case with the Lime Trade Finance Fund (Pluto TF-1) and the Optimus Fund.
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