The Lime fund was withdrawn after 4 years… What is the essence of the “preferential buyout” dispute? (on the weekend)

In October 2019, Lime Asset Management stopped buying assets worth 1.6 trillion won. The Financial Supervisory Service conducted an audit in August of that year and announced the results the following year.

However, last month, four years later, the Financial Supervisory Authority again announced the results of the Lime Fund audit, and this time it set off a spark in the political world.

The Financial Supervisory Authority said that some investors received incentives and bought back the Lime Asset Management Fund before the redemption suspension, as they included Democratic MP Kim Sang-hee.

Let’s look at the Lime Fund buyout allegations that resurfaced four years later.

FSS “Preferential buyout, reasonable doubts”

On the 24th of last month, the Financial Supervision Service announced the results of an additional audit of Lime Asset Management.

The key to the announcement is that a month or two ago, in October 2019, when the Lime Fund was put on hold, a manager granted a preferential buyout to some investors.

Press release of the Financial Supervision Service on August 24 on the results of the audit “FT audit of executives affected by large investors.”

The Financial Supervisory Service noted that among the investors who received the preferential buyout were some influential figures such as the OO Central Association (20 billion won), a listed company OO (5 billion won), and several members of the National Assembly (200 million won). Later, Democratic MP Kim Sang-hee was nominated as a member of the National Assembly.

The FSA found that only 4 of Lime’s 60 open funds were bought illegally, such as blocking the fund.

These four funds had insolvent assets, so normal repayment was not possible at the time, and for this reason the FSS explained that there was no choice but to arouse “reasonable suspicion” of preferential treatment being granted.

Kim Sang Hee: “I only bought it back because it was recommended to me”

Representative Kim Sang Hee held a press conference and strongly denied that it was unfounded.

Rep. Kim Sang-hee visits the Financial Supervisory Service on August 25 and protests.

I invested in Lime Matisse #4 fund by Mirae Asset Securities but at the end of August 2019 Mirae Asset recommended a buyout and insisted that I just follow it.

He also explained that he invested about 200 million won and suffered a loss of about 36 million won.

Rep. Kim criticized, “The FCA is maliciously using the anger and bloody tears of the victims of the Lyme incident for next year’s general election, and this is an abuse of power using the FCA, spreading false information.” and slander.”

■ How far can you see this as a problem?

Since the Financial Supervision Service during the course of the audit confirmed the movement of funds at that time, it is very likely that illegal redemption took place, for example, by blocking the actual circulation of funds.

However, many experts are of the opinion that it is possible to hold Lime Asset Management liable for the redemption of funds only through illegal management of funds, and it is difficult to hold investors accountable.

If the seller of the fund, Mirae Asset Securities, etc., read the media reports and admitted that Lime Asset Management’s situation was difficult and advised Rep. Kim and others to buy back the shares, then it is difficult to hold even Mirae Asset Securities accountable.

At present, the Financial Supervision Service In some circumstances, investors were advised to buy back shares, and Mirae Asset Securities and other companies were also checked to see if the buyback had taken place.

The problem could arise if Mirae Asset Securities declared the insolvency of Lime Asset Management through illegal channels or if the circumstances of the illegal redemption of an unjustified redemption were revealed.

It also remains to be seen whether Mirae Asset Securities responded systematically at the company level and issued instructions to redeem only some of the funds.

However, even if this problem is identified, it is difficult to immediately blame the preferential buyout on investors such as Representative Kim Sang-hee.

Experts believe that Congressman Kim can be considered to have received a “soft buyout” only when it turns out that he knew in advance about the insolvency of the Lime Fund and actively asked for a buyout.

■What happened in September 2019?

To determine if this is indeed a soft buy, we also need to look at what the atmosphere was like at the time.

This is because it can be difficult to disagree with a buyout demand from sellers or investors such as Mirae Asset Securities if media reports such as “Lime Fund is unstable” appeared beforehand.

Back in October 2019, Lime Asset Management announced a buyout suspension, but insolvency concerns surfaced in July 2019, three months earlier.

Then there were media reports that the prosecution was investigating Lime Asset Management for the use of undisclosed information, and a search and seizure was carried out.

It was also suspected that he was illegally disposing of the fund’s income by exchanging convertible bonds (CB) of the KOSDAQ companies in an expedient manner.

Perhaps due to these suspicions, in September 2019, a total of 31 Lime Asset Management (open) funds were bought out for 306.9 billion won. It can be seen that quite a few people already knew about the problem with Lime Asset Management.

However, even if the media exposed Lime Asset Management’s insolvency and demanded a buyout, it could become a problem if an illegal request or buyout order was made.

In the end, it seems that this was found out during the investigation of the prosecutor’s office.

Democratic Party lawmakers, including Congressman Kim, allege that Lee Bok Hyun, a former prosecutor who was dubbed the so-called “Seok Yeol Yoon Division,” used the Financial Supervisory Service in a political offensive against the Democratic Party.

Some FAS officials have also criticized the announcement of test results through an anonymous “blind” community. This content of geumgum-won has become an instrument of politics.

Capture messages and comments posted in the anonymous community of Financial Supervisory Services (blind)

The prosecution has moved quickly since the announcement of the results of the FSB check on the 24th of last month.

Within a week of receiving the relevant information, we launched a forced investigation, arresting and searching for sellers of funds suspected of soft buyouts, such as Mirae Asset Securities.

After all, an investigation by the prosecution was inevitable to find out whether the preferential ransom was correct and whether the people who received the ransom were involved in the process.