Police Arrest Jang Ha-won of 'Discovery Fund'... Investigation into Higher-Ups Involved (Comprehensive)

[Image source=Yonhap News]

[Asia Economy reporters Seongpil Cho and Gyumin Oh] The police have applied for a pre-arrest warrant for Jang Ha-won, CEO (63) of Discovery Asset Management (Discovery), who is suspected of causing damage worth about 250 billion KRW due to the suspension of redemption of a private equity fund.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced on the 9th that it applied for an arrest warrant for CEO Jang on the 6th on charges of violating the Capital Markets Act and fraud under the Act on the Aggravated Punishment of Specific Economic Crimes. The Seoul Southern District Prosecutors' Office is reportedly reviewing whether to request an arrest warrant for CEO Jang.

The Discovery fund was sold through commercial banks and securities firms such as Hana Bank and IBK Industrial Bank of Korea from 2017 to 2019. According to the Financial Supervisory Service, as of the end of April last year, the balance that banks and others could not repay due to the suspension of redemption was estimated at about 256.2 billion KRW. CEO Jang is the younger brother of Jang Ha-sung, the Chinese ambassador and former Blue House policy chief, and established Discovery Asset Management in 2016.

Earlier, in July last year, the police banned CEO Jang from leaving the country and conducted raids on Hana Bank, IBK Industrial Bank of Korea, Korea Investment & Securities, and Hana Financial Investment, which sold the Discovery fund. During this process, it was revealed that Ambassador Jang and former Blue House policy chief Kim Sang-jo also invested large sums in the fund. The police also summoned CEO Jang for investigation at least three times regarding the fund sales process.

A Seoul police official explained at a regular press briefing on the day regarding the background of the arrest warrant application for CEO Jang, "We have continued the investigation after the summons and judged that it is time to take custody measures against the subject," adding, "It was necessary to investigate various suspicions, and the timing was appropriate." Regarding allegations of involvement by so-called higher-ups such as former chief Kim, the official said, "We are reviewing whether to investigate related persons," and "The warrant application for CEO Jang is also linked to this."

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