Victims of Gieun Sales Discovery Fund Reject FSC Dispute Resolution Committee Decision

Signs of Prolonged Conflict Due to 100% Compensation Demand Through Privatization

[Asia Economy Reporter Park Sun-mi] Conflicts are showing signs of prolonged duration as victims who invested in the Discovery Fund sold by IBK Industrial Bank of Korea and the Anti-Fraud Victims Committee refuse to accept the decision of the Financial Supervisory Service (FSS) Dispute Mediation Committee.

According to the financial sector on the 4th, the IBK Discovery Fund Countermeasure Committee and the victims are preparing for a full-scale struggle by not accepting the FSS dispute mediation decision.

The FSS decided on a dispute mediation plan for the IBK Discovery Fund on May 24, which was accepted by IBK and the representative case of the Discovery Fund real estate-backed bond fund. However, the representative case of the Discovery Fund global bond fund rejected the decision by not submitting the acceptance form by the deadline on the 1st. The victims are demanding 100% compensation through private settlement.

Regarding this, the Discovery Fund Countermeasure Committee stated, "This is likely the first time since the private equity fund incident that victims have not fully accepted the FSS dispute mediation committee's decision," adding, "While victims of Korea Investment & Securities who subscribed to the same Discovery Fund receive 100% compensation following Korea Investment & Securities' announcement of private settlement compensation, IBK victims are in an unfair position receiving only 40% to 80%, averaging around 50%, due to the FSS decision."

Meanwhile, the FSS held a dispute mediation committee in May and recommended that IBK, which sold the Discovery Fund, compensate up to 80% of the investment loss. The target is the outstanding balance of 76.1 billion KRW (269 accounts) of the Discovery Fund sold by IBK as of the end of April.

IBK sold the 'Discovery US Fintech Global Bond Fund' and the 'Discovery US Real Estate Senior Bond Fund' in amounts of 361.2 billion KRW and 318 billion KRW respectively from 2017 to 2019. However, as the US asset manager failed to recover the bonds invested with the fund money, approximately 60.5 billion KRW and 15.6 billion KRW were delayed in redemption as of the end of April.

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