Prosecutors Expand Investigation into Public Enterprises Involved in Optimus... Could It Become a New Flashpoint?

Interest in Involvement of Political and Government Figures... Investigation into Investment Process and Lobbying Allegations at Jeonpa Promotion Agency

[Asia Economy Reporter Baek Kyunghwan] As the prosecution expands its investigation into public institutions that invested in Optimus Asset Management, intense attention has focused on whether political and government officials were involved. The Korea Radio Promotion Association (KRPA), which invested nearly 100 billion won in Optimus, has already undergone a search and seizure. Considering President Moon Jae-in's directive for a thorough investigation into the public institutions' investment process, investigations into the remaining institutions are inevitable.

According to the prosecution on the 21st, the Economic Crime Division of the Seoul Central District Prosecutors' Office is reviewing investigations into other public institutions such as the Korea Rural Community Corporation, Korea Racing Authority, and Korea Electric Power Corporation, following the KRPA. A member of the investigation team stated, "We understand that the government ministries overseeing these institutions plan to conduct audits, but it seems necessary to separately examine the investment process."

Currently, the investigation team is analyzing Optimus-related materials obtained during the search and seizure of the KRPA on the 16th, dividing them by department. The prosecution secured testimonies indicating that Jeong Young-je, former CEO of Optimus Alternative Investments, provided bribes to the fund management officer to secure the KRPA's investment and proceeded with a search and seizure of the Gyeongin headquarters. At that time, the fund management officer is known to be the current head of the KRPA Gyeongin headquarters.

In particular, the investigation team plans to revisit the situation in October 2018 when the KRPA requested an investigation into allegations of embezzlement and breach of trust by Optimus officials. At that time, the KRPA requested an investigation to verify whether the investment was made legally, but in May 2019, the Seoul Central District Prosecutors' Office cleared Kim Jae-hyun, CEO of Optimus Asset Management, and Jeong Young-je, CEO of Optimus Alternative Investments, of charges.

The timing of investigations into the other institutions is still being considered. The Ministry of Agriculture, Food and Rural Affairs and the Ministry of Trade, Industry and Energy, which oversee these institutions, plan to conduct audits, and the Blue House has also stated, "The government ministries to which the public institutions belong will conduct the initial assessment."

The ongoing audit by the accounting firm on Optimus Asset Management is also a variable. The exact scale of losses suffered by these public institutions during the Optimus investment process will be finalized through this audit. However, the audit has been delayed because the prosecution seized accounting-related materials during a search and seizure of Optimus Asset Management's headquarters in June.

However, since the audit period and speed at the relevant ministries may be prolonged, the prosecution may independently initiate investigations. The scale of losses can be confirmed through internal audits, so the prosecution's investigation is expected to focus on the circumstances under which the investments were made and whether there were any improper solicitations from Optimus during the investment proposal process.

If the investigation expands significantly to public institutions, political repercussions will be inevitable. A document titled "Fund Defect Remedy," reportedly secured by the prosecution, contains the names of about 20 political and government officials. Key figures include Blue House officials, politicians, and businesspeople, with additional individuals involved in the public institution investment process possibly emerging, such as Lee Jin-ah, former Blue House administrator and wife of former Optimus director Yoon Seok-ho.

Some of these public institutions have been confirmed to be separately receiving legal advice in preparation for future prosecution investigations. Furthermore, if the loss scale is finalized after the audit and investment recovery is deemed impossible, they plan to file lawsuits against NH Investment & Securities, the sales company, and Optimus, the asset manager.

A legal expert commented, "Since the Blue House has issued directives, it is appropriate to consider that investigations into public institutions have effectively already begun. However, because the prosecution cannot help but be mindful of the political sphere during the investigation, it will not be easy to quickly determine whether this is a simple fraud or a power-related gate."