[2020 National Audit] Yoon Seok-heon "100% Compensation for Lime Fund Not Intended to Shift Responsibility"

[Image source=Yonhap News]

[Asia Economy Reporter Park Sun-mi]“100% Compensation for Lime Fund Is Not to Shift Responsibility onto the Financial Supervisory Service”

On the 23rd, Yoon Seok-heon, Governor of the Financial Supervisory Service (FSS), dismissed claims that the decision to compensate 100% of the principal to investors of the Lime Trade Finance Fund was intended to shift responsibility onto the FSS during the comprehensive audit of the Financial Services Commission and the FSS by the National Assembly’s Political Affairs Committee.

On the same day, Yoon Jae-ok, a member of the People Power Party, questioned Governor Yoon, suggesting that the FSS’s decision to provide 100% compensation for the Lime Trade Finance Fund was aimed at quickly resolving complaints and covering up the incident. He pointed out that with disciplinary actions against CEOs of financial companies related to the Lime fund anticipated and recommendations for full compensation issued, it seemed suspicious that the FSS was shifting its own responsibility.

In response, Governor Yoon stated, "The responsibility of financial companies lies in compensating or reimbursing customers for their damages," and added, "The responsibility of the Financial Supervisory Service is to be accountable to the public if it fails to properly maintain the financial system. The decision for 100% compensation is not to shift the FSS’s responsibility."

During the audit, there were also allegations that the FSS not only failed to properly manage and supervise private equity funds but may have even colluded in financial fraud. Kwon Eun-hee, a member of the People’s Party, recalled that Optimus was at risk of receiving prompt corrective action from financial authorities in 2017 due to insufficient capital, but was granted a deferral after submitting a business normalization plan. She criticized, "The FSS informed them of ways to avoid prompt corrective action. This is no different from colluding in private equity fund financial fraud. Criminal responsibility must be pursued."