'100 Billion Won Fund Corruption' Jang Ha-won’s First Trial… "Denies All Charges"

Jang Ha-won, an advisor at Discovery Asset Management who was prosecuted for illegally managing fund investments worth around 100 billion won and causing a large-scale suspension of redemptions, denied all related charges on the 30th.

At the first trial held on the same day at the Seoul Southern District Court Criminal Division 13 (Presiding Judge Myung Jae-kwon), Jang's defense attorney stated, "He only provided consulting necessary for asset management and did not actually engage in professional private equity investment business," adding, "The fact that consulting was provided was reported to the Financial Supervisory Service, and since the business was conducted only within the scope permitted for outsourcing to third parties under the Capital Markets Act, we claim innocence."

Jang Ha-won, Advisor at Discovery Asset Management
Photo by Yonhap News

Regarding the indictment that fund money was invested in the Seoul Housing and Communities Corporation (SH) purchase rental housing project and that former executives of Discovery Asset Management, including Jang, personally acquired shares in the project’s developer company A, the defense attorney also denied the charges, saying, "As an executive of the investment company that invested in company A, shares were acquired for the purpose of controlling company A. There is no consideration relationship between the investment and the shares."

Concerning the allegation that the poor asset quality and capital erosion of the fund’s underlying assets were concealed while selling the fund, receiving 109 billion won from about 450 investors, the defense admitted, "There were instances during some fund sales periods where the default rate was not stated in the investment proposal," but argued, "Quarterly operation reports were provided to the sales companies, and these reports contained sufficient information to understand the default rate." They added, "The overall repayment rate for all 42 funds actually reaches 99.6%."

Former Discovery executives indicted alongside Jang and Yoon also denied all charges. Yoon was charged with receiving about 50 million won as a bribe or commission related to the SH purchase rental housing project, in which Jang formed a real estate fund and invested.

Regarding this, Yoon’s defense attorney said, "He participated as a partner in company A and pushed the work forward, and the money received into the bank account was just a legitimate salary," adding, "We deny all the charges."

Meanwhile, Jang is the younger brother of Jang Ha-sung, a former ambassador to China who served as the Chief Presidential Secretary for Policy under the Moon Jae-in administration. He was arrested and indicted in July 2022 on similar charges but was acquitted in the first trial in December of the same year and is currently undergoing an appeal trial.

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