KB Asset Management 'Block Deal' Scandal: Former Head Choi Woongpil Steps Down

Integrated Reorganization of Value and Active Management on the 14th

[Asia Economy Special Investigation Team] Choi Woong-pil, head of the Value Management Division at KB Asset Management, who exhibited unreasonable trading behavior during the block deal to sell KMH shares in bulk, has stepped down from his position.

According to the financial investment industry on the 17th, KB Asset Management merged the Value Management Division and the Active Management Division on the 14th, changing to a single 'Equity Management Division' system.

In this process, former head Choi, who managed the 'KB Value Focus Fund,' stepped down from frontline management. He was the person who recently conducted a block deal selling about 21% of KMH shares held by KB Asset Management to Keystone Private Equity (PE). During the block deal, he caused controversy by engaging in trading behavior that deviated from convention, such as selling shares to a private equity fund without prior consultation with KMH. He has currently expressed his intention to resign from KB Asset Management.

The 'KB Value Focus Fund,' a representative value stock fund of KB Asset Management, was launched in November 2009 and exceeded 1 trillion KRW in assets under management by September 2011. By November 2013, its size grew to over 2 trillion KRW but has sharply declined to 400 billion KRW as of this month. The 'KB Small and Medium Cap Fund' also temporarily suspended sales through a 'soft closing' after exceeding 600 billion KRW in size, but its current size is only 200 billion KRW.

Sim Hyo-seop, former head of the Active Management Division, was appointed as head of the Equity Management Division. Jeong Yong-hyun, former team leader of Value Management Team 1, took the position of Value Management Director, and Kim Kyung-jin, former team leader of Active Management Team 1, became Active Management Director. Previously, the Active Management Division consisted of the Research Team, Active Management Teams 1 and 2, and the Trading Team, while the Value Management Division was composed of Value Management Teams 1, 2, and 3.

A KB Asset Management official explained, "The Value Management Division and the Active Management Division were originally one, but they were separated during the period when value stock funds were in the spotlight. Recently, as value stock funds have declined, they were merged again. Since the organization size has decreased, it was judged unnecessary to maintain two separate divisions, so it was streamlined."

Special Investigation Team