'Arrest Hearing for Jang Ha-won, CEO of Discovery Fund Corruption'
Jang Ha-won, CEO of Discovery Asset Management and a key figure in the Discovery Fund corruption scandal that caused a large-scale suspension of redemptions in 2019, now faces the possibility of detention.
![[Image source=Yonhap News]](http://www.asiae.co.kr/news/img_view.htm?img=2022060900170096443_1654701420.jpg)
On the 8th at 10:30 a.m., Judge Kim Ji-sook, in charge of warrants at the Seoul Southern District Court, conducted a pre-arrest detention hearing (warrant substantive examination) for CEO Jang, former Head of Investment Division Kim, and former Operations Team Leader Kim. They are accused of fraudulent and unfair trading under the Capital Markets Act, unregistered financial investment business, breach of trust, and bribery under the Act on the Aggravated Punishment of Specific Economic Crimes. The decision on whether to detain CEO Jang and others is expected to be announced late in the afternoon.
CEO Jang and others are suspected of operating funds by investing in specific bonds through Discovery Investment without registering as a financial investment business from January 2016 to January 2019. They are also accused of obtaining illegal profits by investing and using fund money in unspecified places in advance, and of covering redemption payments for certain distressed funds with other fund money without properly informing investors while managing multiple funds.
The prosecution is investigating whether there was any illegality in their fund management process. In relation to this, Discovery’s office and Seoul Housing & Communities Corporation (SH) were raided in July. CEO Jang was also summoned for questioning on the 31st of last month.
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Meanwhile, in a separate case, CEO Jang and others were indicted on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes related to the suspension of redemptions, but were acquitted in the first trial in December last year. The prosecution’s appeal has led to the second trial currently underway.
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