Russia Fund Meetings Held One After Another... "Redemption Suspension Extended"

Russian Investment Fund Beneficiaries Hold Consecutive General Meetings
Decision to Extend Redemption Suspension

[Asia Economy Reporter Hwang Junho] Due to the prolonged Russia-Ukraine war, the suspension period for redemptions of Russian funds is also being extended. Asset management companies are holding a series of unitholder meetings to continue the decision to suspend redemptions.

According to the Korea Financial Investment Association on the 18th, asset management companies such as Hanwha, Kiwoom, KB, Woori, Shinhan, and Mirae Asset, which manage a total of 160 billion KRW worth of Russia-related funds, held unitholder (investor) meetings for each fund from the 12th to the 15th to decide whether to extend the suspension of redemptions for Russian funds. The agenda items for the meetings were “Decision on continuing the suspension of redemptions” and “Decision on the timing and method of payment of redemption proceeds upon resumption of redemptions.” These are proposals to continue the suspension decision. If a majority of unitholders’ voting rights or at least one-quarter of the total number of beneficiary certificates are present, the agenda passes.

Among the 22 funds that held unitholder meetings, only one fund, the ‘Mirae Asset Eastern Europe Sector Representative Securities Sub-Investment Trust No. 1,’ reached a resolution. At this meeting, 39.88% of the beneficiary certificates out of a total of 7.7 billion units attended, establishing the quorum. However, the suspension of redemptions is expected to continue. According to the resolution, this fund will maintain the suspension of redemptions until the Russia situation stabilizes.

For the remaining 21 funds, the quorum was not met, so the meetings were not established. Therefore, “deferred unitholder meetings” must be held within two weeks. An industry insider stated, “Although deferred meetings must be held continuously, the suspension of redemptions can be maintained.”

Whether or not the unitholder meetings were held, the suspension of redemptions continues, but since this is an unprecedented situation, there are no clear guidelines. Accordingly, the asset management industry has inquired with financial authorities whether unitholder meetings must be held regularly every two weeks until the quorum is met. An industry representative said, “The suspension of redemptions is expected to continue until the Russia situation stabilizes. Under current law, despite the inconvenience to investors, unitholder meetings must be convened every two weeks until the quorum is established, so we have made inquiries regarding this.”

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