[Exclusive] Will Daishin Securities exercise the right to indemnity towards the former WM center chief who sold a large-scale Lime Fund
[Exclusive] Will Daishin Securities exercise the right to indemnity towards the former WM center chief who sold a large-scale Lime Fund
  • 박효선 기자
  • 승인 2020.01.23 18:25
  • 최종수정 2020.02.27 15:31
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This article is translated by AI company Flitto and Infostock Daily using neural machine translation technology.


서울 명동 대신증권 본사 사옥 전경. 사진= 대신증권
A panoramic view of the headquarters
building of Daeshin Securities in Myeong-dong, Seoul.
Photo = Daishin Securities

[Infostock Daily= Reporter Park Hyo-sun] It is expected that Daishin Securities will request a right to indemnity against former Banpo WM center chief who sold a Lime fund of a scale of 1 trillion won. If the loss is confirmed in the inspection results of the Samil Accounting Corporation next month, it is to cover the amount to be compensated to the affected investors.

◇ Lime investor filed lawsuit against Daishin Securities Banpo WM Center

According to the financial investment industry, investors who are affected by the lime management fund will be charged with fraud against the Daishin Securities Banpo WM Center. Gwanghwa, a legal firm that is in charge of the lime management fund investor lawsuit, will receive related documents such as damages to the repurchase suspension fund at Daishin Securities Banpo WM Center by the 31st. In response, Daishin Securities was found to be considering a claim for the right of indemnity to cover the related expenses.

The right to indemnity is the right to claim compensation to the person who provided the cause of the cost. Although a 2 trillion won worth of investor damage is expected due to the suspension of the lime redemption, the amount of funds that Lime Asset Management can compensate has been found to be approximately 20 billion won.

If the loss is confirmed, not only Lime Asset Management, but also sales companies (banks and securities companies) should compensate for the funds sold through WM centers and PWM centers. As of the end of July last year, before the former head of Banpo WM center left the company, Daishin Securities sold the most at an accumulated total of 1.17 trillion won. It was followed by Woori Bank which sold 1.64 trillion won, Shinhan Financial Investment 443.7 billion won, KB Securities 422.4 billion won, and Shinhan Bank 421.4 billion won.

Last year, Daishin Securities and Shinhan Financial Investment Co., Ltd. were the main sellers of the Lime Asset Management Fund. In particular, Daishin Securities, the largest seller of Lime Management, was a strong sales channel of lime funds, with a sales portion of more than 70% at the end of 2015. The former head of the Banpo WM Center was at the core of the reason why Daishin Securities stood out as the key seller of the Lime Management Fund.

He joined Daishin Securities in 2013 as a PB and was promoted as the center chief of Banpo WM Center in 2017 in recognition of the sales performance of Lime Asset Management Fund. The company has been selling lime 'Pluto FI D-1' and 'Tetis 2' funds mainly for residents of the Banpojai apartment complex. After the suspension of lime repurchase last July, he moved to Meritz Securities.

◇ A ‘prelude’ before the lawsuit…will the PBs of selling companies be continuously burdened with the right to indemnity

Daishin Securities argues that it can only decide whether to claim the right to indemnity only after the results of the due diligence are released. “The amount of lime sales collected in the announcement of the investment agreement, is calculated from the portion that was collected by the seller in the process of moving the lime baby fund to the parent fund, and most of them included the volume of the institutional supplies, and only 69 billion won was sold to individual investors,” said a Daeshin Securities official.

They emphasized that only a few Lime trade and finance funds were sold. It is estimated that most of the 69 billion won worth of lime funds (about 50 billion won) that Daishin Securities sold to individual investors through retail were sold at the Banpo WM Center.

Regarding the claim for the right to indictment, the company said, "It is too early to discuss the claim for the right to indemnity in the current situation because it will be decided on how to compensate after the due diligence results are made,” and that “it is expected to take a long time as it (the potential for responsibility) is intertwined.

However, it is expected that Daishin Securities will not be able to escape from its incomplete sales responsibility since it also earned a certain fee profit from the sales of Lime funds. “If the amount of damage related to the lime fund is revealed, the seller can claim the right to envision the employees who sold the product in consideration of the shareholder’s opposition and the allegations of misappropriation,” said a financial company legal affairs team official.

“The securities also increased commission revenue by empowering employees who sold the product of the lime fund, which would not be free from the responsibility of incomplete sales.” "It will take another few months after the results of the due diligence are released, but if the court accepts the responsibility of the employee (former WM Center Chief) in the future, it will be able to prevent a substantial amount of compensation that Daeshin Securities has to pay," he said.

“But Daishin Securities will also be responsible for a certain amount of the compensation, so it will be important to know how much the amount of the compensation will be recognized as the amount of the claims is expected to be tens of billion won.” He also predicted that, "In the future, Woori Bank and other vendors are expected to hold PB responsible for selling lime products one after another, so there will be a tangled lawsuit against not only investors, vendors and management companies, but also employees of financial companies for many years to come."
Park Hyo-sun reporter hs1351@infostock.co.kr

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