[이코노믹리뷰=황대영 기자] The Financial Supervisory Service’s Sanctions Deliberation Committee (sanctions review) imposed a partial suspension of work for one month, a fine for negligence, and a partial suspension of work for IBK Industrial Bank (024110), which sold Lime Discovery Fund. In addition, Kim Do-jin, former head of the Industrial Bank of Korea, lowered the level of disciplinary punishment from severe punishment.
On the 5th, the Financial Supervisory Service announced that it had held a second sanctions review against IBK and decided to recommend such sanctions to the Financial Services Commission. The details of the sanctions will be finalized through the approval of the FSS Commissioner, deliberation by the Securities and Futures Commission, and the resolution of the Financial Services Commission for each subject of further action.
The Financial Supervisory Service is planning to propose to the Financial Services Commission a one-month suspension of business and imposition of a fine for the IBK due to violation of the obligation to establish internal control standards (the Financial Company Governance Act). IBK’s prosecution measures were postponed without being able to conclude at the first sanctions review held on the 28th of last month.
The sanctions trial decided on a’cautionary warning worth’ for Kim Jeon. Previously, the Financial Supervisory Service had previously informed the former chief of the chief Kim of a census warning. The level of sanctions by the financial authorities on financial company executives is classified into five levels: recommendation of dismissal, suspension of work, censure warning, cautionary warning, and caution. Among them, censure warning or higher corresponds to severe disciplinary action that restricts employment in the financial sector for three to five years.
The Financial Supervisory Service said, “The sanctions deliberation committee held two meetings, including today’s meeting, in consideration of the fact that this is an important issue that caused social controversy, such as the occurrence of damage to many consumers.” He explained that the decision was made through in-depth deliberation, such as listening closely to the statements and explanations of the field (including legal representatives) and the Prosecutors Office.
IBK sold 3612 billion won and 318 billion won worth of Discovery US Fintech Global Bond Fund and Discovery US Real Estate Senior Bond Fund in 2017-2019, respectively. However, as US managers are unable to recover bonds invested in fund funds, repurchases by domestic investors are also delayed. About 90 billion won was tied up, including 69.5 billion won in global bond funds and 21.9 billion won in senior real estate bond funds.
Investors have claimed that IBK made an incomplete sale and demanded an advance payment based on the principle of full compensation for the investment principal. IBK held its board of directors in June last year and decided to pay 50% of the initial investment capital to investors in Discovery US Fintech Global (Senior) Bond Fund. In addition, IBK also sold the Lime Asset Management Fund about 29.4 billion won.
Banknotes are paying attention to this decision. This is because IBK is the first target of sanctions in banking related to insolvent private equity funds. The Financial Supervisory Service plans to hold all sanctions in March, starting with IBK, Woori Bank, Shinhan Bank, Industrial Bank, Busan Bank, and Hana Bank. On the 25th, the first sanctions court against Woori Bank, Shinhan Bank and Shinhan Financial Group will be held.