Former CEO Speaks Out on Redemption Suspension Incident
Regarding Allegations of Using Presidential Trip for Escape, "I Was in Shanghai Before Going to Vietnam"
Former Optimus CEO Lee Hyuk-jin (right) is pictured with Park Hang-seo, head coach of the Vietnam national football team, at a meeting for overseas Koreans hosted by President Moon Jae-in on March 22, 2018, at the Hanoi Marriott Hotel in Vietnam. Photo by Seong Il-jong, office of the Future United Party lawmaker
[Asia Economy Reporter Ji-hwan Park] Lee Hyuk-jin, former CEO of Optimus Asset Management (age 53), recently claimed regarding the Optimus private equity fund fraud case that erupted in South Korea, "I am merely a victim who could not have been involved," and asserted that it was a staged fraud orchestrated by Optimus CEO Kim Jae-hyun, financial authorities, law firms, and accounting firms.
On the 11th (local time), Lee spoke to a domestic media outlet from his office in Saratoga, California, USA, stating, "The Optimus redemption suspension incident is a meticulously planned fraud staged by a cartel of financial moguls, law firms, and accounting firms, using CEO Kim, a 'figurehead,' as a front." Lee is the founder of Ask Veritas Asset Management, the predecessor of Optimus. He resigned as Optimus CEO in July 2017 and stepped away from company management. Currently, Lee is engaged in kimchi sales and delivery business around the San Francisco area.
He said, "If I had profited from this fraud case, would I be doing this kind of work now?" and added, "As a victim whose company was seized, I have never handled even hundreds of millions of won, let alone billions." He emphasized, "Legal advisors such as Joo-won Yang of Yangho Law Firm (former president of Nara Bank), who are part of the Optimus advisory group, should be investigated."
He also explained allegations that he fled overseas using President Moon Jae-in’s diplomatic trip. He said he was already in Shanghai, China, before going to Vietnam, the president’s tour destination. After staying in Shanghai, he returned to Korea on March 21, 2018, to attend the Optimus shareholders' meeting. After a failed attempt to change the major shareholder at the meeting, he followed then Financial Services Commission Chairman Choi Jong-ku to Vietnam to express his grievances.
Regarding his relationship with Lim Jong-seok, President Moon’s special advisor for foreign affairs and security, who is an alumnus of Hanyang University, he said, "It is true that we know each other," but questioned, "If Lim and I were really close, would I have run for the Seoul Seocho-gap district, where the chances of winning the 19th general election were low?" He pointed out, "The essence of this case is a fraud scheme planned so that legal advisors like Yang receive 10 to 50 times the usual legal advisory fees while raising investment funds and drafting contracts."
Recently, the domestic capital market has been rocked by large-scale fund redemption suspensions, following last year’s Lime Asset Management incident and now Optimus. The size of Optimus funds expected to face future redemption suspensions is estimated to reach up to 500 billion won. As financial authorities have identified four additional asset management companies showing signs of similar insolvency to Optimus, concerns about a chain reaction of redemption suspensions are growing.
The Financial Supervisory Service (FSS) conducted a reality check on 52 asset management companies from November last year to January this year, focusing on 10 companies showing abnormal signs such as high proportions of private bonds, asset and maturity mismatches, and high individual investor ratios. As a result, five companies, including Optimus, underwent additional written examinations. It is predicted that once the private equity fund full inspection team is launched this month, inspections on the remaining four companies will begin.
A financial authority official said, "We understand that the Optimus redemption suspension was triggered by prior notice of on-site inspections," adding, "When the on-site inspection was announced, it became difficult to hide insolvency, leading to the announcement of redemption suspension. We are keeping in mind the possibility of similar cases occurring in the other four companies."
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