NH Investment & Securities to Fully Compensate Optimus Principal... 'Contract Cancellation' Rejected

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] NH Investment & Securities will return the full principal amount to general investors of the Optimus Asset Management fund but has decided not to accept the Financial Supervisory Service Dispute Mediation Committee's (DMC) reason for return based on 'contract cancellation due to mistake.'

On the morning of the 25th, NH Investment & Securities will hold a board meeting to make a final decision on whether to accept the FSS DMC's recommendation regarding the sale of the Optimus fund. Earlier, on the 5th of last month, the FSS DMC recommended returning the full principal amount to individual investors on the grounds of 'contract cancellation due to mistake.'

The board is expected to decide to fully compensate general investors for their principal. However, it has decided not to accept the 'contract cancellation due to mistake' recommended by the DMC.

The refusal to accept contract cancellation appears to be with future litigation in mind. Although the FSS states that there is no problem in claiming indemnity from Hana Bank and others, advisory results suggest that accepting this could cause issues.

NH Investment & Securities has maintained that it is difficult to accept the 'contract cancellation' proposal, which places sole responsibility on the fund seller, and has argued that a 'multi-party compensation' recommendation should be issued to hold jointly liable Hana Bank as the custodian and the Korea Securities Depository as the administrative management company.

Following the board's final decision, NH Investment & Securities plans to hold a press conference to announce whether it will accept the DMC's recommendation and its litigation plans against Hana Bank and the Korea Securities Depository.

The Optimus incident centers on attracting investors by claiming to invest in safe accounts receivable guaranteed by public institutions and local governments, but instead investing in private bonds of insolvent companies with no real business, causing damage amounting to several hundred billion won. NH Investment & Securities is the largest seller related to the Optimus fund redemption suspension incident. Of the 54 Optimus funds (KRW 697.4 billion) sold from June 2019 to May 2020, 35 (KRW 432.7 billion) had redemption delays, with approximately KRW 300 billion of that amount coming from general investors.

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