Jung Young-chae, President of NH Securities, "Hana Bank and Korea Securities Depository Must Take Appropriate Responsibility"... Full Effort on Lawsuits and Claims

Press Conference Held After Temporary Board Meeting on the 25th
Full Effort to Claim Compensation and Reimbursement Rights Against Hana Bank and Korea Securities Depository

[Asia Economy Reporter Lee Seon-ae] "Although NH Investment & Securities is taking proactive steps to return the principal, the Optimus incident is a matter of joint responsibility involving the asset management company, which is the main perpetrator of the fraud, as well as the custodian bank and the fund administration company. The financial authorities will also fully understand this."

Jung Young-chae, CEO of NH Investment & Securities, stated at a press conference regarding the Optimus fund at 2 p.m. on the 25th, "We have decided to pay 100% of the principal to Optimus fund investors," adding, "This decision is not about canceling the contract to invalidate it, but rather about returning 100% of the principal to customers while acquiring the beneficiary certificates and all related rights." CEO Jung emphasized, "The Optimus incident involves joint responsibility not only of the asset management company, which is the main perpetrator of the fraud, but also the custodian bank and the fund administration company. To preserve the right of recourse, we had no choice but to opt for a private settlement with customers," and added, "Although this differs from the contract cancellation recommended by the Dispute Mediation Committee, from the customer's perspective, it is the same in terms of recovering the full investment principal."

He said, "We are relieved to implement measures to protect our valued customers through this proactive principal repayment," and evaluated, "Through this, we uphold the company's customer-centric management philosophy, restore customer trust, and believe that the entire organization returning to a normal operational system as soon as possible to respond to industry changes and new business opportunities aligns with maximizing shareholder value."

He added, "The company will take this painful experience as a lesson, comprehensively improve the process of verifying and selling financial products, and strive to become a wiser and more sincere asset manager for our customers."

NH Investment & Securities plans to file a lawsuit for damages and claim the right of recourse against Hana Bank, the custodian bank, and the Korea Securities Depository, the fund administration company. NH Investment & Securities accepts responsibility as a simple distributor responsible for investment brokerage services who failed to fully fulfill customer protection obligations, but Hana Bank holds the position that it must bear appropriate responsibility as it had practical oversight duties over fund management.

Regarding the Korea Securities Depository, it was also stated that it bears responsibility for misleading distributors and investors into believing that normal fund management was ongoing for a long period by changing private bonds listed on the asset statement to public institution accounts receivable at the request of the asset management company.

CEO Jung said, "For the Optimus incident to serve as an opportunity to gain the trust of investors and the public, the roles and responsibilities of stakeholders involved in custody, fund administration, and sales between the asset management company and investors must be clearly defined," and diagnosed, "We expect that participants in the capital market will establish a system to faithfully perform their respective duties, leading to the sound growth of the capital market and the stable increase of customer assets."

Park Sang-ho, Head of Compliance, pointed out, "Hana Bank was the only company that could know the investment proposal stating investment in public institution accounts receivable and the actual assets included in the fund, but according to the company's findings, it accepted abnormal management instructions to concentrate fund investments in private bonds of six companies, including Art Paradise, whose identities are unclear."

He also criticized, "The Korea Securities Depository was responsible for evaluating fund assets and calculating the net asset value, and the asset statement is a document similar to a balance certificate listing the assets held by the fund. Even though it received the actual private bond contracts included, it falsified the asset statement as public institution accounts receivable at Optimus's request, making the asset management company's fraudulent operations possible, just like Hana Bank, and cannot escape responsibility."

Lim Gye-hyun, Head of Corporate Strategy, said, "We do not believe this principal repayment decision will unduly affect NH Securities' performance," adding, "We have already reflected a provision of 256.7 billion KRW in the financial statements, and considering the assets recoverable from the fund, the investments of general investors can be sufficiently covered." He continued, "The largest shareholder, NongHyup Financial Group, also respected the board's decision," and said, "We believe that recovering more funds through lawsuits against Hana Bank and the Korea Securities Depository is the way to enhance shareholder value, so we will make every effort."

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