28th Sanctions Deliberation Committee “Can’t make a decision”
First deliberation, pay attention to the role of’barometer’ of the sanctions level
In the News Reporter Eun-Shil YooㅣThe decision on the level of sanctions against Lime Fund and IBK Industrial Bank (Chief Yoon Jong-won), which sold the Discovery Fund, was postponed to the 5th of next month. The Financial Supervisory Service listened sufficiently to the statements of IBK officials and the Inspection Bureau, but failed to make a decision on the level of sanctions.
The Financial Supervisory Service held a non-face-to-face sanctions review committee (sanctions review) on the 28th, and proposed and deliberated on the action plan as a result of inspections on Discovery Asset Management and IBK, but decided to resume the meeting on the 5th of next month.
It is known that the sanctions hearing held at 2 pm on this day began until 8 pm, starting with Discovery Asset Management, a discovery fund manager. The discussion continued until late, but it was delayed once without being able to reach a conclusion.
In 2017-2019, IBK sold the Discovery US Fintech Global Bond Fund and the Discovery US Real Estate Senior Bond Fund worth 3612 billion won and 318 billion won, respectively. This fund was designed by Discovery Management, a domestic manager, and mostly sold by IBK.
However, when a U.S. manager was accused of fraud, the assets were frozen and the bonds invested in the fund were not recovered. Currently, a total of 91.4 billion won has been delayed in repurchase, and the damage caused by the delay in repurchase has been passed on to investors. IBK also sold 29.4 billion won of Lime Fund, which caused a large-scale redemption suspension.
The FSS informed of the disciplinary proposal prior to the sanctions review. It is known that the disciplinary plan included severe disciplinary action for dismissal (recommendation of dismissal, suspension of work, warning of censure), along with the disposition of fines and warnings against censure against Chief Kim Do-jin at the time the fund was sold.
This sanctions trial is drawing attention as the FSS is the first to sanction banknotes related to the insolvency of private equity funds. As the view that this result is the barometer of disciplinary action for banking sectors prevails, it is highly likely that the disciplinary action and disposition of the heads of other banks who are facing sanctions will be conducted based on IBK.
After determining the level of sanctions against IBK, the Financial Supervisory Service plans to conduct sanctions on Woori, Shinhan, Industrial, and Busan banks involved in the private equity crisis within 2-3 months.