[Asia Economy Reporter Oh Ju-yeon] Lime Asset Management, which is embroiled in controversy over the suspension of fund redemptions, issued a press release on the 22nd, stating that the company is currently focusing on maximizing asset recovery and is considering all possible measures, including the replacement of shareholders and management, to completely reform the company in the future. They also emphasized that the scale of the deferred fund redemptions remains at the initially disclosed level of approximately 1.7 trillion KRW, with little possibility of expansion. Regarding former Vice President Lee Jong-pil, they criticized him, saying that even employees feel betrayed.
Lime Asset Management clarified that the so-called "possibility of up to 4 trillion KRW in suspended redemptions" mentioned by some is a misunderstanding. Most of the funds with deferred redemptions at Lime Asset Management are structured as FOFs (Funds of Funds). Customers invest in sub-funds, which in turn invest in master funds (such as Pluto FI D-1, Thetis 2, Pluto TF) in a re-intermediation structure. Because these re-intermediated funds must go through distributors, the fund assets under custody are counted redundantly by that amount. This point applies equally to other asset managers’ re-intermediated funds.
Lime Asset Management explained, "The amount invested in re-intermediated funds corresponds to 1.8 trillion KRW out of the total assets under custody of about 4.3 trillion KRW," adding, "Based on the funds directly subscribed by customers, there is almost no possibility that the deferred redemption amount will exceed the approximately 1.7 trillion KRW mentioned in last week’s press release."
Regarding the fund due diligence by Samil Accounting Corporation, they stated, "The original purpose of commissioning the accounting firm was for the asset manager and distributors to identify the substance and impairment signs of the assets on behalf of investors, not to evaluate the fair value of the underlying assets." They added, "Subsequently, the Financial Supervisory Service requested asset-specific valuations, and we agree that reflecting fair prices by asset provides minimum information to beneficiaries." However, they noted that since Lime funds include various assets such as convertible bonds, bonds with warrants, mezzanine securities, private bonds, real estate project financing (PF), other asset managers’ funds, venture investment funds, and private equity (PE) investments, it is impossible to apply a uniform standard.
Lime Asset Management said, "Referring to the data from Samil Accounting Corporation, we intend to calculate the appropriate value for each asset through the internal Collective Investment Property Valuation Committee by reflecting asset characteristics, changes after due diligence, and industry best practices," adding, "The reflection of the base price does not mean final loss, and the base price will fluctuate depending on the actual recovery situation of each asset after evaluation."
They expressed a sense of betrayal regarding former Vice President Lee Jong-pil, who disappeared. Lime Asset Management stated, "The company was completely unaware of Lee Jong-pil’s personal misconduct, and since he continued normal duties even after the suspension of customer fund redemptions, we could not have known until the arrest warrant was issued and he went into hiding," adding, "As a major shareholder of the company, we never expected him to commit fraud, so the company also feels betrayed." They further said, "If it is confirmed during the Financial Supervisory Service’s inspection and the prosecution’s investigation that personal crimes caused damage to customers and the company, the company will respond through lawsuits and other means." They emphasized that the article’s mention of "withdrawing over 10 billion KRW from company funds just before fleeing" is practically impossible and an unfounded false report.
Looking ahead, Lime Asset Management reiterated its commitment to maximizing asset recovery for customers. They said, "The deferred redemption funds are difficult to manage by the usual fund managers," adding, "We are receiving assistance from domestic and international law firms, and if necessary, we may delegate more tasks externally. We are also in the process of recruiting a new CIO (Chief Investment Officer) and are considering measures such as replacing shareholders and management."
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