[Breaking News] Three Executives Including Optimus CEO Kim Jae-hyun Arrested for 'Fund Fraud'

Attorney Yoon (left) from H Law Firm, associated with Optimus Asset Management involved in the 'large-scale fund redemption suspension incident,' and Fund Manager Song are entering the courtroom on the 7th at the Seoul Central District Court in Seocho-gu, Seoul, to attend the pre-arrest suspect interrogation (detention warrant substantive examination). Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Seongpil Cho] Kim Jaehyun, CEO of the private equity firm Optimus Asset Management (Optimus), and two executives have been arrested.

Chief Judge Choi Changhoon of the Seoul Central District Court, who is in charge of warrants, held a pre-arrest detention hearing for them on the 7th and issued arrest warrants, stating, "There is sufficient evidence to prove the charges, the matter is serious, and considering the response shown after the fund redemption suspension incident, there are grounds for detention." The Optimus executives arrested along with CEO Kim include the second-largest shareholder Lee and Director and H Law Firm CEO Yoon.

Regarding Director Song, who was also subject to an arrest warrant request, Chief Judge Choi dismissed the warrant, saying, "Considering the progress of the investigation so far, the suspect's actual position and role, and social ties such as family, it is difficult to recognize grounds and substantiality for detention."

CEO Kim and others are accused of raising thousands of billions of won from investors by claiming to invest in public institution sales receivables, then forging documents to include poor-quality private bonds issued by loan companies and real estate consulting firms in the fund.

The Seoul Central District Prosecutors' Office Investigation Division 1 (Chief Prosecutor Oh Hyuncheol), which is investigating this case, applied charges including unfair trading under the Capital Markets Act and requested arrest warrants on the 5th.

After securing the custody of CEO Kim and others, the prosecution plans to investigate how far the fund money flowed and whether the fund sales companies, trustees, and administrative management companies bear legal responsibility.

The prosecution is also reportedly considering expanding the investigation team, consisting of about 10 prosecutors from Investigation Division 1 and the Crime Proceeds Recovery Division, to form a dedicated task force (TF) for the fund fraud case.