KB Securities Claims Reimbursement from Australian Real Estate Fund Manager

[Asia Economy Reporter Choi Dae-yeol] KB Securities has filed a subrogation claim lawsuit against JB Asset Management.

According to the financial investment industry on the 20th, KB Securities reportedly filed a subrogation claim lawsuit against JB Asset Management at the Seoul Southern District Court in late last month. A subrogation claim lawsuit is a procedure in which a corporation (subrogee) that has paid a debt on behalf of a debtor demands reimbursement of the amount from the debtor.

Previously, KB Securities sold a total of 326.4 billion KRW worth of the 'JB Australia NDIS Fund' managed by JB Asset Management, with 236 billion KRW to institutional investors and 90.4 billion KRW each to corporations and individuals. This fund is a professional private equity trust fund investing in Australian local businesses involved in the Australian government's disability housing rental projects.

It was revealed that the borrower, LBA Capital, violated the loan agreement and operated the business differently from the original contract, raising allegations of investment fraud. KB Securities and JB Asset Management took urgent asset recovery measures and recovered about 87% of the investment funds first. Subsequently, KB Securities has refunded the full principal amount to individual investors for the time being. It is understood that the subrogation claim lawsuit was filed to compensate for losses incurred during this process. The amount of the subrogation claim has not been disclosed.