Police: "Jang Ha-sung of 'Discovery Fund'... Summon Decision Will Be Made Through Investigation"

[Asia Economy Reporter Cho Sung-pil] The police have stated that they will conduct an investigation as necessary regarding Jang Ha-sung, the Ambassador to China, who is known to have invested in the private equity fund 'Discovery Fund,' which caused damages worth approximately 250 billion KRW.

At a briefing on the 14th, the Seoul Metropolitan Police Agency responded to questions about considering summoning Ambassador Jang by saying, "Our official position is that we cannot confirm this," while also stating their intention to investigate as needed. The police added, "We are focusing on investigating whether fraud occurred, including when problems arose during the suspension of redemptions of the Discovery Fund itself," and emphasized, "This is something that must be determined through the investigation."

The Discovery Fund was created by Jang Ha-won, the younger brother of Ambassador Jang and CEO of Discovery Asset Management. In April 2019, a suspension of redemptions occurred, resulting in significant investor losses. Meanwhile, it is known that Ambassador Jang invested approximately 6 billion KRW under his own and his family's names. Consequently, suspicions have been raised regarding Ambassador Jang's involvement in the fund's growth process.

In this regard, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency summoned and questioned CEO Jang, the ambassador's younger brother, on the 9th and 11th. When asked about the handling of CEO Jang's legal status, the police said, "Further investigation is necessary," and added, "This will be decided at the final stage."

Unlike public funds, which raise money from an unspecified large number of investors, private equity funds refer to funds raised from a small number of investors and invested separately by asset management companies for specific purposes. Ambassador Jang and others are known to have invested in an 'open-ended fund' that allows free deposits and withdrawals during the investment period. The police stated, "Whether there was preferential treatment related to the open-ended nature will be determined through future investigations."

Earlier, the police began a preliminary investigation into this case in early last year, imposed a travel ban on CEO Jang in July, and launched a formal investigation by conducting raids on 17 locations, including the sales companies Industrial Bank of Korea, Hana Bank, Korea Investment & Securities, and Hana Financial Investment.

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