[The Editors' Verdict] The Truth Behind the 'Lime Scandal' Must Be Revealed Through Reinvestigation

Lime Scandal Targets Politics Again
Opposition Calls It "Political Maneuver Ahead of Next Year's General Election"
Unclear Suspicions Must Be Revealed Through Reinvestigation

On the 24th, when the Financial Supervisory Service announced that Lime Asset Management had given preferential redemptions to some investors just before declaring a large-scale suspension of redemptions, Kim Sang-hee, a member of the Democratic Party of Korea who was named as a beneficiary of the preferential treatment, was unreachable for a while. Kim's mobile phone was turned off, and her office repeatedly responded that they were "verifying the facts." It was only after more than half a day that Kim issued a statement, claiming that she had entrusted assets to Mirae Asset Securities, the brokerage firm involved, and suffered losses worth tens of millions of won, but there was no preferential redemption.

According to Mirae Asset Securities and Kim, she invested in the "Lime Martini No.4 Fund" created by Lime Asset Management at the recommendation of Mirae Asset Securities, the brokerage firm she dealt with. She and 15 other investors in the fund all redeemed their investments around the end of August 2019 following the brokerage firm's recommendation. As Kim explained, she may have redeemed based on the advice of the brokerage firm's private banker (PB). Since the Lime scandal first surfaced in July 2019 amid suspicions of rolling over fund returns, it is possible that a "competent PB" actively encouraged redemptions to minimize client losses. However, compared to other securities firms that held briefings to reassure investors and prevent redemptions due to concerns about a "fund run" (a sudden mass withdrawal of funds from a fund), this case is highly unusual.

Moreover, the Financial Supervisory Service's claim of "preferential redemption" does not seem unreasonable given that Lime Asset Management reportedly used company funds to redeem the Lime Martini No.4 Fund and others in which Kim invested. The Lime scandal involved repeated indications that the asset management side lobbied political circles to conceal fund insolvency. Democratic Party lawmakers Ki Dong-min, Lee Soo-jin (proportional representation), and former Democratic Party lawmaker Kim Young-choon are currently on trial for allegedly receiving political funds from Kim Bong-hyun, former chairman of Star Mobility and a key figure in the Lime scandal. At the time, Justice Minister Choo Mi-ae removed Prosecutor General Yoon Seok-youl's investigative authority over the Lime case amid allegations of prosecutors' drinking parties and subsequently disbanded the joint investigation team at the Southern District Prosecutors' Office that was handling the case. Suspicious aspects remain regarding the Financial Supervisory Service's investigation and the prosecution's handling of Lime Asset Management during the Moon Jae-in administration, which must be clarified through reinvestigation.

The Lime scandal affected over 4,000 victims and involved losses amounting to 1.6 trillion won. Lime Asset Management, once the top hedge fund firm, engaged in various illegal investment methods, and lobbying in political and business circles was confirmed during the process. Therefore, the Democratic Party and Kim's claims that the Financial Supervisory Service's actions were a "political operation to tarnish the Democratic Party ahead of next year's general elections" lack credibility.

According to the National Assembly's disclosure of lawmaker assets, Kim first reported 280.17 million won held at Mirae Asset Daewoo (now Mirae Asset Securities) during the 2019 regular asset disclosure. Since asset disclosures are based on the previous year's year-end, it appears that she invested in the fund by pooling deposits held at institutions such as Boksagol Credit Union (69.82 million won) and Nonghyup Bank (97.83 million won), as well as her spouse's deposits. This year's asset disclosure shows that Kim has investments worth approximately 442.65 million won through Mirae Asset Securities and NH Investment & Securities, accounting for 60% of her total deposits of 730.23 million won. Having suffered a loss of about 30 million won from the Lime fund investment, Kim has continued to pursue more aggressive securities investments rather than savings deposits. During coverage of the Lime scandal, one victim who sobbed, saying "I lost my entire fortune" and "I will never invest in private equity funds again," keeps coming to mind.

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