Police Conduct Search and Seizure at IBK Headquarters Related to Discovery Fund

[Asia Economy Reporter Park Sun-mi] As the police accelerate their investigation into the Discovery fund redemption suspension case, including imposing a travel ban on Jang Ha-won, CEO of Discovery Asset Management (Discovery), they also conducted a search and seizure at the headquarters of IBK Industrial Bank of Korea, the Discovery fund distributor.

According to the police and banking sources on the 23rd, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency has been conducting a search and seizure at the IBK Industrial Bank of Korea headquarters located in Euljiro, Jung-gu, Seoul since the morning. From 2017 to 2019, IBK sold Discovery US Fintech Global Bond Fund and Discovery US Real Estate Senior Secured Bond Fund worth 361.2 billion KRW and 318 billion KRW, respectively.

However, as the US asset manager failed to recover the bonds invested with the fund money, as of the end of April, redemptions of 60.5 billion KRW and 15.6 billion KRW, respectively, have been delayed.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency also conducted a search and seizure at Hana Bank’s Euljiro headquarters the previous day and secured materials related to the sale of Discovery funds.

The police are reportedly applying charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act against Jang Ha-won, CEO of Discovery Asset Management, in connection with the Discovery fund redemption suspension. The police have recently imposed a travel ban on CEO Jang.

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