Prosecution Arrests ‘Optimus’ CEO Kim Jaehyun and Second Major Shareholder Lee for Accelerated Investigation...

Optimus Asset Management faces fund redemption suspension crisis.
[Image source=Yonhap News]

[Asia Economy Reporter Choi Seok-jin] The prosecution investigating the fund fraud allegations involving Optimus Asset Management, which caused a redemption suspension scandal worth thousands of billions of won, has arrested Kim Jae-hyun, CEO of Optimus (50), and the second-largest shareholder, Mr. Lee.

According to the prosecution on the 4th, the Seoul Central District Prosecutors' Office Investigation Division 1 (Chief Prosecutor Oh Hyun-chul), which is investigating the case, obtained arrest warrants from the court and arrested CEO Kim and Mr. Lee this morning.

In this regard, a prosecution official stated, "In relation to the case involving a certain asset management company (Optimus) and the Financial Supervisory Service's request for investigation, arrest warrants for two individuals, asset management company CEO A and private bond issuer CEO B, were executed this morning."

CEO Kim and others are suspected of raising thousands of billions of won from investors by claiming to invest in public institution sales bonds, but in reality, they forged documents and invested in loan companies and insolvent businesses. This issue came to light after the recent declaration of redemption suspension.

The prosecution is currently investigating, viewing the actions of CEO Kim and others as fraudulent unfair trading under the Capital Markets Act and fraud under the Act on the Aggravated Punishment of Specific Economic Crimes.

Securities firms such as NH Investment & Securities, which sold the fund, filed complaints with the prosecution on the 22nd, accusing Optimus executives of fraud and other charges, and the Financial Supervisory Service also requested an investigation.

During the search and seizure process, the prosecution found signs that Optimus had systematically attempted to destroy evidence, such as preemptively replacing multiple PC hard disks, and judged there was a risk of flight or evidence destruction, leading to the execution of arrest warrants for Mr. Kim and others.

On the 24th and 25th of last month, the prosecution conducted search and seizure operations at 18 locations, including Optimus headquarters in Samseong-dong, Gangnam-gu, Seoul, H Law Firm located in the same building as Optimus, NH Investment & Securities, Korea Investment & Securities, Hana Bank as the custodian bank, and the Korea Securities Depository, which manages fund administration.

The Korea Securities Depository is under investigation by the prosecution after it was found that while preparing the fund asset statement, it recorded bonds of loan companies included in the fund assets as if they were bonds of public enterprises.

Additionally, on the 30th of last month, the prosecution summoned and investigated Yoon Mo (43), a director of Optimus and the representative lawyer of H Law Firm, and has been conducting summons investigations of related parties. Travel bans had already been imposed on Mr. Kim, Mr. Lee, and Mr. Yoon, who were arrested today.

The prosecution is expected to proceed with detention after a final review of the necessity of detention through additional investigations of Mr. Kim and Mr. Lee.