‘Discovery Fund’ CEO Jang Ha-won... Transferred to Custody

Violation of the Capital Markets Act, Fraud Charges under the Act on Special Cases Concerning the Prevention of Illegal Activities

[Image source=Yonhap News]

[Asia Economy Reporter Oh Gyumin] Jang Ha-won, CEO of Discovery Asset Management (Discovery), who is accused of selling defective funds and using new investment money to pay returns to existing investors, has been sent to prosecution in custody.

On the 16th, according to the police, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency sent four people, including CEO Jang, who is accused of violating the Capital Markets Act and fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, to the Seoul Southern District Prosecutors' Office. CEO Jang was sent in custody, while two related persons were sent without detention. The Discovery Asset Management corporation was also handed over to the prosecution.

On the 8th, Kwon Ki-man, the chief judge in charge of warrants at the Seoul Southern District Court, issued an arrest warrant, stating, "There is a risk of evidence destruction and flight." However, regarding Discovery officials, he dismissed the warrant, saying, "Although the charges are serious and there is considerable reason to suspect that they committed the crimes as charged, since they have fixed residences and it is difficult to see a risk of evidence destruction or flight, it is hard to see the necessity and appropriateness of detention at this stage."

CEO Jang is accused of selling the fund while hiding the possibility of fund insolvency and using the so-called 'Ponzi scheme' method, where investment money from new investors is paid as returns to existing investors despite no sales profits.

The Discovery fund was sold through commercial banks and securities firms such as Hana Bank and IBK Industrial Bank from 2017 to 2019. CEO Jang established Discovery Asset Management in 2016 and managed the fund. He is also the younger brother of Jang Ha-sung, former Blue House Policy Chief and Ambassador to China.

According to the Financial Supervisory Service, as of the end of April last year, the total unpaid balance due to redemption suspension that banks and others could not repay was approximately 256.2 billion KRW.

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