NH Securities Not Invited to NongHyup's 59th Anniversary Ceremony

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[Asia Economy Reporter Park Sun-mi] Jung Young-chae, CEO of NH Investment & Securities, who is struggling with the Optimus fund fraud issue, will not attend the NH Nonghyup anniversary event marking its 59th founding anniversary on the 15th. Although NH Investment & Securities is regarded as a core subsidiary alongside Nonghyup Bank within Nonghyup Financial Group, it was not invited to the birthday party.

According to a Nonghyup official on the 11th, Nonghyup will hold its 59th founding anniversary event at 10:30 a.m. on the 14th in the main auditorium of the Nonghyup Central Association headquarters. The event will last about an hour, including a pre-ceremony performance, various awards, and a screening of the founding anniversary video, followed by a luncheon. Considering the COVID-19 situation, the attendees were limited to 115 key figures from the government, National Assembly, related organizations, and core personnel from Nonghyup Central Association and its affiliates.

Within Nonghyup Financial Group, Chairman Kim Kwang-soo, Nonghyup Bank President Son Byung-hwan, Nonghyup Life CEO Hong Jae-eun, and Nonghyup Property & Casualty Insurance CEO Choi Chang-soo will attend. It has been confirmed that NH Investment & Securities CEO Jung will not participate.

The Nonghyup side explained that since this is an overall event at the Central Association level with many invitees, only the heads of the bank, life insurance, and property & casualty insurance among the financial holding companies were invited. A Nonghyup Financial official said, “Since Nonghyup Central Association affiliates include not only financial companies but also companies engaged in agricultural, livestock, and distribution economic businesses, there have been many cases where the CEO of NH Investment & Securities was not an attendee at other business report meetings or anniversary ceremonies, and originally was not an attendee for this Nonghyup Central Association founding anniversary either.” However, since securities are considered a core subsidiary alongside the bank within Nonghyup Financial, Jung’s absence is also interpreted as a decision made with the Optimus incident in mind.

CEO Jung is facing difficulties resolving issues with investors who suffered losses due to the suspension of redemption of private equity funds managed by Optimus Asset Management. According to the Financial Supervisory Service, 46 funds managed by Optimus, totaling 515.1 billion KRW, have suspended or are struggling with redemptions. Of these, NH Investment & Securities sold 432.7 billion KRW worth, accounting for 84% of the total.

On the 6th, investors affected by the Optimus redemption suspension visited NH Investment & Securities and urged CEO Jung and other executives for prompt compensation. The investors argue that since the Optimus fund did not invest in public institution sales receivables at all, it constitutes 'fraud,' and therefore NH Investment & Securities, as the seller, should apply contract cancellation due to mistake like in the Lime Asset Management fund case and return the full principal. NH Investment & Securities plans to decide on support measures for Optimus fund victims at the regular board meeting on the 27th.

Earlier, IBK Industrial Bank also simplified its 59th founding anniversary ceremony held on the 31st of last month, mindful of the COVID-19 situation and the Discovery and Lime fund incidents. Ahead of the anniversary event, there were calls and protests from Discovery fund victims urging the event’s suspension.

Meanwhile, Nonghyup’s founding anniversary date has been changed to August 15 starting this year. Since the launch of the integrated Nonghyup in 2000, which merged the Nonghyup, Chukhyup, and Ginseng Cooperative Central Associations, the anniversary was celebrated on July 1. However, at the board meeting in May this year, the founding anniversary was changed to August 15, the date marking the 1961 merger of Nonghyup Bank and the former Nonghyup Cooperative.