Korea Lime situation: Difference between revisions
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= Korea Lime situation(라임 사태) = |
= Korea Lime situation(라임 사태) = |
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[[File:라임사태.jpg|thumb|320x320px|a scene from the news about Korea's Lime setting.]] |
[[File:라임사태.jpg|thumb|320x320px|a scene from the news about Korea's Lime setting.]] |
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In July 2019, LIME began selling convertible bonds of companies listed on the [[KOSDAQ]], and around this time, suspicion arose that the company was maintaining an illegal rate of return. The share prices of stocks that were in the fund run by LIME crashed, and there were concerns of an imminent fund run crises. This led to redemptions being frozen.<ref>{{Cite web|last=입력 2020.04.30 12:42|date=2020-04-30|title=껍데기뿐인 증권사 리스크규정…라임사태 불렀다|url=https://news.joins.com/article/23766784|access-date=2020-07-02|website=중앙일보|language=ko}}</ref> The issue was caused by purchasing a large volume of insolvent assets, including mezzanine of KOSDAQ zombie companies, for increasing the rate of return in the short-term. In Korea there are regulations which limit how many bonds that can be owned by one entity. However, to bypass this regulation, "parking transactions" were done, by making purchases in the name of another company. It is also alleged that when the fund experienced a loss, returns were fabricated by replacing the loss with monies from another fund.<ref>{{Cite web|last=입력 2020.01.26 06:00|date=2020-01-26|title=라임펀드가 뭐야? 도주한 부사장은 어디에? 궁금증 다섯가지|url=https://news.joins.com/article/23690212|access-date=2020-06-29|website=중앙일보|language=ko}}</ref> |
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The lime crisis began in July 2019 with allegations that Lime Asset Management was illegally managing yields by trading convertible bonds (CBs) of KOSDAQ companies, and in October<ref>{{Cite web|last=입력 2020.01.26 06:00|date=2020-01-26|title=라임펀드가 뭐야? 도주한 부사장은 어디에? 궁금증 다섯가지|url=https://news.joins.com/article/23690212|access-date=2020-06-29|website=중앙일보|language=ko}}</ref>, the stock price in the fund operated by Lime Asset Management fell and eventually chose to suspend redemption. |
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The case is currently under investigation at the Criminal Affairs Department 6 of the Seoul Southern District Prosecutors' Office.<ref>{{Cite web|date=2020-04-26|title=靑·與 vs 尹 3R 격돌...檢 '비리 수사' 속도|url=http://www.sedaily.com/NewsView/1Z1MIISRU3/GK0109|access-date=2020-06-29|website=서울경제|language=ko}}</ref> |
The case is currently under investigation at the Criminal Affairs Department 6 of the Seoul Southern District Prosecutors' Office.<ref>{{Cite web|date=2020-04-26|title=靑·與 vs 尹 3R 격돌...檢 '비리 수사' 속도|url=http://www.sedaily.com/NewsView/1Z1MIISRU3/GK0109|access-date=2020-06-29|website=서울경제|language=ko}}</ref> |
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Lime Asset Management operated privately and sold only private equity funds that could be invested in unlisted stocks or mezzanine. <ref>{{Cite web|date=2020-03-01|title=사기로 추락한 ‘합리적 상상력’…라임자산운용의 두 얼굴|url=http://www.hani.co.kr/arti/society/society_general/930452.html|access-date=2020-06-29|website=www.hani.co.kr|language=ko}}</ref>The private equity fund was sold using the method invested by the fund to attract many investors.<ref>{{Cite web|date=2020-03-01|title=사기로 추락한 ‘합리적 상상력’…라임자산운용의 두 얼굴|url=http://www.hani.co.kr/arti/society/society_general/930452.html|access-date=2020-06-29|website=www.hani.co.kr|language=ko}}</ref><ref>{{Cite web|last=경인방송|title=라임CI펀드는 고객들을 어떻게 속였나 - 뉴스|url=http://www.ifm.kr/news/281743|access-date=2020-06-29|website=경인방송 90.7Mhz|language=ko}}</ref> |
Lime Asset Management operated privately and sold only private equity funds that could be invested in unlisted stocks or mezzanine. <ref>{{Cite web|date=2020-03-01|title=사기로 추락한 ‘합리적 상상력’…라임자산운용의 두 얼굴|url=http://www.hani.co.kr/arti/society/society_general/930452.html|access-date=2020-06-29|website=www.hani.co.kr|language=ko}}</ref>The private equity fund was sold using the method invested by the fund to attract many investors.<ref>{{Cite web|date=2020-03-01|title=사기로 추락한 ‘합리적 상상력’…라임자산운용의 두 얼굴|url=http://www.hani.co.kr/arti/society/society_general/930452.html|access-date=2020-06-29|website=www.hani.co.kr|language=ko}}</ref><ref>{{Cite web|last=경인방송|title=라임CI펀드는 고객들을 어떻게 속였나 - 뉴스|url=http://www.ifm.kr/news/281743|access-date=2020-06-29|website=경인방송 90.7Mhz|language=ko}}</ref> |
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== |
== Timeline of the case == |
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===== February 19, 2020 ===== |
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the Prosecutor's Office conducted a search and seizure in connection with Shinhan Asset Management and LIME Asset Management. |
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===== March 31, 2020 ===== |
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associates of Chairman Kim of Star Mobility was arrested.<ref>{{Cite web|title=[단독] 라임 '회장님' 곧 잡나···경찰 '오른팔 역할' 측근 체포|url=https://news.naver.com/main/read.nhn?mode=LSD&mid=sec&oid=025&aid=0002988966&sid1=001|access-date=2020-07-02|website=news.naver.com|language=ko}}</ref> |
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The Financial Supervisory Service conducted an on-site survey of Woori Bank and Hana Bank, the distributors of lime asset management, in the fourth week of April 2020, and will conduct an on-site survey of two to three securities firms in the fifth week. When the on-site investigation of securities firms is completed, legal reviews on fraud and incomplete sales will be launched in May based on the results compiled.<ref>{{Cite web|last=파이낸셜뉴스|date=2020-04-23|title=라임 현장조사 내주 마무리..내달 불완전판매 등 법률검토|url=http://www.fnnews.com/news/202004231534046943|access-date=2020-06-29|website=파이낸셜뉴스|language=ko-KR}}</ref> |
The Financial Supervisory Service conducted an on-site survey of Woori Bank and Hana Bank, the distributors of lime asset management, in the fourth week of April 2020, and will conduct an on-site survey of two to three securities firms in the fifth week. When the on-site investigation of securities firms is completed, legal reviews on fraud and incomplete sales will be launched in May based on the results compiled.<ref>{{Cite web|last=파이낸셜뉴스|date=2020-04-23|title=라임 현장조사 내주 마무리..내달 불완전판매 등 법률검토|url=http://www.fnnews.com/news/202004231534046943|access-date=2020-06-29|website=파이낸셜뉴스|language=ko-KR}}</ref> |
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===== April 18, 2020 ===== |
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the Seoul Southern District Court issued an arrest warrant for Kim, who served as an administrator of Cheong Wa Dae on charges of bribery and leaking confidential information on public affairs under the Specific Crimes-weighted Punishment Act. The former administrator, identified only by his surname Kim, is suspected of taking 49 million won in bribes and leaking and delivering a preliminary investigation document on rhymes written by the FSS in April 2019.<ref>{{Cite web|date=2020-04-18|title=‘라임 사태 개입 의혹’ 전 청와대 행정관 구속|url=http://www.hani.co.kr/arti/society/society_general/937599.html|access-date=2020-06-29|website=www.hani.co.kr|language=ko}}</ref><ref>{{Cite web|last=수정: 2020.04.24 01:01|first=입력: 2020 04 24 00:23|date=2020-04-24|title=[속보]라임사태 주범 이종필·김봉현 검거|url=http://news.khan.co.kr/kh_news/khan_art_view.html?artid=202004240023001&code=940100|access-date=2020-06-29|website=news.khan.co.kr|language=ko}}</ref> |
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===== April 23, 2020 ===== |
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The prosecution raided the Financial Services Commission of the Government Complex in Seoul, and the data obtained reportedly included data related to a former Cheong Wa Dae administrator involved in the case.<ref>{{Cite web|last=전명훈|date=2020-04-23|title=검찰 '라임사태' 금융위 압수수색…전 靑행정관 관련자료 확보(종합)|url=https://www.yna.co.kr/view/AKR20200423100152004|access-date=2020-06-29|website=연합뉴스|language=ko}}</ref> |
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Jongpil Lee, former Vice President of LIME, and Bonghyeon Kim, former Chairman of Star Mobility, were arrested outside of a residence in the Seongbuk-gu area of Seoul. Former chairman Kim was hiding out together with former LIME Vice-President Jongpil Lee, and was keeping 530 million won in cash (about US$428,000), and was storing 5.5 billion won (about US$4.4 million) in a rental locker located in Seoul. Former chairman Kim testified to the police, "[I] was transporting three luggage carriers containing 5.5 billion won, and since they were so heavy, I hurt my back."<ref>{{Cite web|date=2020-05-06|title=[단독] "악 내 허리" 라임 김봉현, 55억 돈다발 숨기다가 삐끗|url=https://news.chosun.com/site/data/html_dir/2020/05/06/2020050603753.html|access-date=2020-07-02|website=news.chosun.com|language=ko}}</ref><ref>{{Cite web|last=곽동건|date=2020-04-25|title='라임 핵심' 김봉현·이종필 검거…수사 본궤도|url=https://imnews.imbc.com/replay/2020/nwtoday/article/5744314_32531.html|access-date=2020-06-29|website=MBC NEWS|language=ko}}</ref><ref>{{Cite web|date=2020-04-25|title=‘라임사태 몸통’ 이종필 구속…“증거인멸·도망 우려”|url=https://www.donga.com/news/article/all/20200425/100804312/1|access-date=2020-06-29|website=www.donga.com|language=ko}}</ref> |
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===== April 25, 2020 ===== |
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The Seoul Southern District Court issued an arrest warrant for former Vice President Lee Jong-pil, saying he is feared to destroy evidence or flee.<ref>{{Cite web|date=2020-04-25|title=[뉴스특보] '라임사태' 수사 본격화…핵심인물 구속 심판대|url=http://www.yonhapnewstv.co.kr/news/MYH20200425010200038|access-date=2020-07-02|website=연합뉴스TV|language=ko}}</ref> |
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===== April 26, 2020 ===== |
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The Suwon District Court issued an arrest warrant for former chairman Kim Bong-hyun on charges of embezzling 24.1 billion won from a bus company in Gyeonggi Province.<ref>{{Cite web|title='라임 핵심' 김봉현 구속…법원 "증거인멸·도주우려"(종합)|url=https://news.naver.com/main/read.nhn?mode=LSD&mid=sec&oid=001&aid=0011572538&sid1=001|access-date=2020-06-29|website=news.naver.com|language=ko}}</ref> |
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At the end of April 2020, the Financial Supervisory Service carried out a due diligence investigation of Woori Bank and Hana Bank, which sold LIME Asset Management. An additional due diligence investigation of two or three securities companies was also scheduled.<ref>{{Cite web|date=2020-06-11|title=라임사태 해결 속도 낸 금융당국…우리·신한은행 현장 검사 착수|url=http://www.sisafocus.co.kr/news/articleView.html?idxno=241153|access-date=2020-07-02|website=시사포커스|language=ko}}</ref> |
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On April 23, 2020, Lee Jong-pil, former vice president of Lime Asset Management, and Kim Bong-hyun, former chairman of Star Mobility, were arrested by the police.<ref>{{Cite web|last=곽동건|date=2020-04-25|title='라임 핵심' 김봉현·이종필 검거…수사 본궤도|url=https://imnews.imbc.com/replay/2020/nwtoday/article/5744314_32531.html|access-date=2020-06-29|website=MBC NEWS|language=ko}}</ref><ref>{{Cite web|date=2020-04-25|title=‘라임사태 몸통’ 이종필 구속…“증거인멸·도망 우려”|url=https://www.donga.com/news/article/all/20200425/100804312/1|access-date=2020-06-29|website=www.donga.com|language=ko}}</ref> The Seoul Southern District Court issued an arrest warrant for former Vice President Lee Jong-pil on the 25th, saying, "There is a risk of destroying evidence or fleeing," and the Suwon District Court on the 26th issued an arrest warrant for former Chairman Kim Bong-hyun on charges of embezzling 24.1 billion won in company money from a bus company in Gyeonggi Province.<ref>{{Cite web|title='라임 핵심' 김봉현 구속…법원 "증거인멸·도주우려"(종합)|url=https://news.naver.com/main/read.nhn?mode=LSD&mid=sec&oid=001&aid=0011572538&sid1=001|access-date=2020-06-29|website=news.naver.com|language=ko}}</ref> |
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== Similar incident == |
== Similar incident == |
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Revision as of 11:17, 2 July 2020
 | It has been suggested that this article be merged with South Korea LIME Investment Scam. (Discuss) Proposed since June 2020. |
Korea Lime situation(라임 사태)
In July 2019, LIME began selling convertible bonds of companies listed on the KOSDAQ, and around this time, suspicion arose that the company was maintaining an illegal rate of return. The share prices of stocks that were in the fund run by LIME crashed, and there were concerns of an imminent fund run crises. This led to redemptions being frozen.[1] The issue was caused by purchasing a large volume of insolvent assets, including mezzanine of KOSDAQ zombie companies, for increasing the rate of return in the short-term. In Korea there are regulations which limit how many bonds that can be owned by one entity. However, to bypass this regulation, "parking transactions" were done, by making purchases in the name of another company. It is also alleged that when the fund experienced a loss, returns were fabricated by replacing the loss with monies from another fund.[2]
The case is currently under investigation at the Criminal Affairs Department 6 of the Seoul Southern District Prosecutors' Office.[3]
Problem
According to the Financial Supervisory Service, Lime Asset Management was found to have sold open funds that can be redeemed at any time while investing in assets with low exchangeability. It also invested more than the principal amount invested in non-current assets, such as private equity bonds, in total revenue swaps (TRS) transactions.[4] Lime Asset Management is known to have signed TRS contracts worth 670 billion won with three securities firms -- Shinhan Financial Investment (500 billion won), KB Securities (100 billion won) and Korea Investment & Securities (70 billion won) -- for the three parent funds (Pluto FI D-1, Tetis 2 and Pluto TF 1).[5]
Total revenue swap (TRS) transactions are transactions in which a securities firm purchases assets for a certain fee from an asset manager, and an asset management company has a return from assets, with the return taken by an asset manager but the assets held by a securities firm. From an asset manager's point of view, the company can increase its return as it can enjoy leverage effects. On the other hand, if losses occur on funds run by an operator, securities firms demand an increase in the TRS's collateral ratio, and if they do not, securities firms charge delayed interest, further lowering the fund's yield.[6]
Lime Asset Management operated privately and sold only private equity funds that could be invested in unlisted stocks or mezzanine. [7]The private equity fund was sold using the method invested by the fund to attract many investors.[8][9]
Timeline of the case
February 19, 2020
the Prosecutor's Office conducted a search and seizure in connection with Shinhan Asset Management and LIME Asset Management.
March 31, 2020
associates of Chairman Kim of Star Mobility was arrested.[10]
The Financial Supervisory Service conducted an on-site survey of Woori Bank and Hana Bank, the distributors of lime asset management, in the fourth week of April 2020, and will conduct an on-site survey of two to three securities firms in the fifth week. When the on-site investigation of securities firms is completed, legal reviews on fraud and incomplete sales will be launched in May based on the results compiled.[11]
April 18, 2020
the Seoul Southern District Court issued an arrest warrant for Kim, who served as an administrator of Cheong Wa Dae on charges of bribery and leaking confidential information on public affairs under the Specific Crimes-weighted Punishment Act. The former administrator, identified only by his surname Kim, is suspected of taking 49 million won in bribes and leaking and delivering a preliminary investigation document on rhymes written by the FSS in April 2019.[12][13]
April 23, 2020
The prosecution raided the Financial Services Commission of the Government Complex in Seoul, and the data obtained reportedly included data related to a former Cheong Wa Dae administrator involved in the case.[14]
Jongpil Lee, former Vice President of LIME, and Bonghyeon Kim, former Chairman of Star Mobility, were arrested outside of a residence in the Seongbuk-gu area of Seoul. Former chairman Kim was hiding out together with former LIME Vice-President Jongpil Lee, and was keeping 530 million won in cash (about US$428,000), and was storing 5.5 billion won (about US$4.4 million) in a rental locker located in Seoul. Former chairman Kim testified to the police, "[I] was transporting three luggage carriers containing 5.5 billion won, and since they were so heavy, I hurt my back."[15][16][17]
April 25, 2020
The Seoul Southern District Court issued an arrest warrant for former Vice President Lee Jong-pil, saying he is feared to destroy evidence or flee.[18]
April 26, 2020
The Suwon District Court issued an arrest warrant for former chairman Kim Bong-hyun on charges of embezzling 24.1 billion won from a bus company in Gyeonggi Province.[19]
At the end of April 2020, the Financial Supervisory Service carried out a due diligence investigation of Woori Bank and Hana Bank, which sold LIME Asset Management. An additional due diligence investigation of two or three securities companies was also scheduled.[20]
Similar incident
There are mass loss cases of DLS and DLF in 2019. However, the DLS and DLF cases were judged to be simple incomplete sales (violation of the Capital Markets and Financial Investment Business Act).[21]
Reference
- ^ 입력 2020.04.30 12:42 (2020-04-30). "껍데기뿐인 증권사 리스크규정…라임사태 불렀다". 중앙일보 (in Korean). Retrieved 2020-07-02.
{{cite web}}: CS1 maint: numeric names: authors list (link) - ^ 입력 2020.01.26 06:00 (2020-01-26). "라임펀드가 뭐야? 도주한 부사장은 어디에? 궁금증 다섯가지". 중앙일보 (in Korean). Retrieved 2020-06-29.
{{cite web}}: CS1 maint: numeric names: authors list (link) - ^ "靑·與 vs 尹 3R 격돌...檢 '비리 수사' 속도". 서울경제 (in Korean). 2020-04-26. Retrieved 2020-06-29.
- ^ "투자자만 1조원 넘게 날렸다...'막장 라임' 몰락의 전말". 중앙일보 (in Korean). 2020-02-14. Retrieved 2020-06-29.
- ^ 입력 2020.01.29 08:00 (2020-01-29). "TRS가 뭐길래…사모펀드 손실, 증권사는 피하고 일반투자자만 떠안을 판". 중앙일보 (in Korean). Retrieved 2020-06-29.
{{cite web}}: CS1 maint: numeric names: authors list (link) - ^ 입력 2020.01.29 08:00 (2020-01-29). "TRS가 뭐길래…사모펀드 손실, 증권사는 피하고 일반투자자만 떠안을 판". 중앙일보 (in Korean). Retrieved 2020-06-29.
{{cite web}}: CS1 maint: numeric names: authors list (link) - ^ "사기로 추락한 '합리적 상상력'…라임자산운용의 두 얼굴". www.hani.co.kr (in Korean). 2020-03-01. Retrieved 2020-06-29.
- ^ "사기로 추락한 '합리적 상상력'…라임자산운용의 두 얼굴". www.hani.co.kr (in Korean). 2020-03-01. Retrieved 2020-06-29.
- ^ 경인방송. "라임CI펀드는 고객들을 어떻게 속였나 - 뉴스". 경인방송 90.7Mhz (in Korean). Retrieved 2020-06-29.
- ^ "[단독] 라임 '회장님' 곧 잡나···경찰 '오른팔 역할' 측근 체포". news.naver.com (in Korean). Retrieved 2020-07-02.
- ^ 파이낸셜뉴스 (2020-04-23). "라임 현장조사 내주 마무리..내달 불완전판매 등 법률검토". 파이낸셜뉴스 (in Korean). Retrieved 2020-06-29.
- ^ "'라임 사태 개입 의혹' 전 청와대 행정관 구속". www.hani.co.kr (in Korean). 2020-04-18. Retrieved 2020-06-29.
- ^ 수정: 2020.04.24 01:01, 입력: 2020 04 24 00:23 (2020-04-24). "[속보]라임사태 주범 이종필·김봉현 검거". news.khan.co.kr (in Korean). Retrieved 2020-06-29.
{{cite web}}: CS1 maint: numeric names: authors list (link) - ^ 전명훈 (2020-04-23). "검찰 '라임사태' 금융위 압수수색…전 靑행정관 관련자료 확보(종합)". 연합뉴스 (in Korean). Retrieved 2020-06-29.
- ^ "[단독] "악 내 허리" 라임 김봉현, 55억 돈다발 숨기다가 삐끗". news.chosun.com (in Korean). 2020-05-06. Retrieved 2020-07-02.
- ^ 곽동건 (2020-04-25). "'라임 핵심' 김봉현·이종필 검거…수사 본궤도". MBC NEWS (in Korean). Retrieved 2020-06-29.
- ^ "'라임사태 몸통' 이종필 구속…"증거인멸·도망 우려"". www.donga.com (in Korean). 2020-04-25. Retrieved 2020-06-29.
- ^ "[뉴스특보] '라임사태' 수사 본격화…핵심인물 구속 심판대". 연합뉴스TV (in Korean). 2020-04-25. Retrieved 2020-07-02.
- ^ "'라임 핵심' 김봉현 구속…법원 "증거인멸·도주우려"(종합)". news.naver.com (in Korean). Retrieved 2020-06-29.
- ^ "라임사태 해결 속도 낸 금융당국…우리·신한은행 현장 검사 착수". 시사포커스 (in Korean). 2020-06-11. Retrieved 2020-07-02.
- ^ NEWSIS (2020-01-30). "금감원, DLF 은행·CEO 역대급 중징계 이유는". newsis (in Korean). Retrieved 2020-06-29.