‘Discovery Fund Redemption Suspension’ Police Investigation Accelerates... Comprehensive Search of Financial Firms (Comprehensive Report 2)

Following Hana Bank the day before
Search and seizure at IBK, Korea Investment & Hana Financial Investment
CEO Jang Ha-won banned from leaving the country

[Asia Economy Reporter Lee Gwan-joo] The police investigating the suspension of redemptions in the Discovery Asset Management (Discovery) private equity fund case launched a comprehensive forced investigation on the 23rd by conducting raids and seizures at IBK Industrial Bank of Korea, Korea Investment & Securities, and Hana Financial Investment.

According to the police, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency, which is investigating this case, sent investigators to the headquarters of IBK Industrial Bank of Korea in Jung-gu, Seoul, to carry out a raid and seizure. Raids and seizures are also being conducted at Korea Investment & Securities and Hana Financial Investment.

This raid and seizure are known to be aimed at securing fund-related materials. From 2017 to 2019, IBK Industrial Bank of Korea sold the ‘Discovery US Fintech Global Bond Fund’ and the ‘Discovery US Real Estate Senior Secured Bond Fund’ in amounts of 361.2 billion KRW and 318 billion KRW, respectively.

The police previously raided Discovery’s headquarters on the 21st and conducted a raid at Hana Bank the day before. With the large-scale raids on financial companies related to Discovery taking place today, it is expected that the police investigation will gain momentum going forward.

According to the Financial Supervisory Service, as of the end of April this year, the outstanding balance that banks and others have been unable to repay due to the suspension of redemptions of Discovery funds was estimated at approximately 256.2 billion KRW.

At the same time, the police have imposed a travel ban on Jang Ha-won (62), CEO of Discovery. CEO Jang is the younger brother of Jang Ha-sung, the Chinese Ambassador and former Chief of Staff at the Blue House. He served as the head of Hana Financial Research Institute from 2005 to 2008 and established Discovery in 2016.

The police are reported to have conducted an internal investigation for several months regarding this case. They are considering applying charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act against CEO Jang.

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