Fund tries to reassure investorsLime Asset Management sought to assure investors that their total delayed payments will not climb beyond the previously assessed 1.7 trillion won ($1.5 billion), while laying blame on an executive who disappeared in the wake of embezzlement allegations.
“There is hardly a possibility of the customers’ delayed payment getting higher than 1.7 trillion won,” Lime Asset Management stated in a Wednesday press release.
The firm also indicated it was betrayed by its former Chief Investment Officer Lee Jong-pil. Lee played a central part in the investment plan before disappearing after authorities issued a warrant for his arrest for alleged embezzlement.
“Until an arrest warrant was issued and he disappeared, we had no idea that Lee had caused such corrupted acts because he worked normally even after we started facing the delayed payment issue,” Lime Asset stated.
The company pushed back against recent media reports, claiming the amount has been exaggerated in some coverage that double counted some funds due to Lime Asset’s indirect investment method.
“Of the 4.3 trillion won of trust funds we have, about 1.8 trillion won have been redirected to other investments,” the press release stated.
The asset management company explained that its fund products take a “fund of fund” form, in which customers would invest in a parent fund and then Lime would direct some of those funds into subsidiary funds and then reinvest them back to the parent fund.
The subsidiary funds in this case included the problematic Pluto TF-1 and Pluto FI D-1, to which Lime redirected funds despite them already having liquidity issues. The two funds had frozen their assets in October.
“The one and only thing we can do at this moment is maximizing asset recovery,” the firm stated. “The remaining employees are doing their best to manage assets that are associated with funds on a daily basis.”
The company made sure that it would notify the customers when they can get their money back, once an outside accounting firm finishes its review of the problematic funds.
Meanwhile, the Financial Supervisory Service announced Thursday it would expand a department dedicated to protecting financial customers.
Agency chairman Yoon Suk-heon said it would expand the department from the current 26 teams to 40 teams with injection of 100 new employees.
“With the recent outbreak of issues regarding high-risk investment products, there were calls for the system to protect financial customers,” Yoon said at a Thursday press briefing.
BY JIN EUN-SOO [email@example.com]