Investigation into Lime's Investment Background and Real Owner's Embezzlement Allegations... External Audit Also Issues 'Disclaimer of Opinion'
[Asia Economy Reporter Yoo Byung-don] It has been confirmed that Metropolitan, a real estate development company that received thousands of billions of won in investment from Lime Asset Management (hereinafter Lime), which suffered damages worth about 1.6 trillion won, and its affiliates were subjected to a prosecution raid in February.
The Criminal Division 6 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Cho Sang-won) announced on the 14th that on February 19, they raided the Metropolitan Group office located in Yeouido, Seoul, and subsequently summoned Metropolitan officials as witnesses for investigation.
The prosecution is reportedly investigating the circumstances under which Metropolitan received investments from Lime and embezzlement charges against Kim Mo (47), the actual owner of Metropolitan who fled overseas. Chairman Kim is a separate individual from Kim Bong-hyun, chairman of Star Mobility, who was identified as Lime’s 'money source.'
Last month, the prosecution obtained an arrest warrant for Chairman Kim of Metropolitan and has requested Interpol through the National Police Agency to issue a wanted notice.
Metropolitan received about 300 billion won in investment from Lime Asset Management and invested in acquiring a resort in the Philippines, developing officetels in Seocho-gu, Seoul, and a beer import business. It was also involved in repurchasing convertible bonds (CBs) of several companies invested in by Lime. However, Samil Accounting Corporation, which conducted due diligence on the Lime fund, reported that a significant portion of the money invested from Lime to Metropolitan is difficult to recover.
In this regard, Metropolitan and its affiliate Metropolitan Construction received a 'disclaimer of opinion' from Lee Jung Ji-yul Accounting Corporation, which conducted an external audit on the 23rd of last month. A disclaimer of opinion is an opinion issued by an external accounting firm when the financial statements of the company cannot be trusted due to insufficient supporting evidence or when there is a concern about the company’s continued existence during the audit process.
Lee Jung Ji-yul Accounting Corporation, which audited the two companies, stated, "We issued a 'disclaimer' opinion because we were unable to perform audit procedures due to not receiving various materials necessary for the audit from management." It is known that most other Metropolitan affiliates also received 'disclaimer of opinion' in their external audits.
The Metropolitan side explained that the disclaimer was inevitable because materials necessary for CB transactions with Lime and settlement were seized by the prosecution, and that a significant part of the 200 billion won embezzlement suspicion will be clarified once the prosecution’s investigation results are announced.
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