Lime Fund Dispute Resolution Next Month... Outlook for Woori, KEB Hana, and Busan Bank

Victims of the Lime Fund are holding a rally urging dispute mediation for victim protection regarding the Lime Fund. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kwangho Lee] The dispute mediation process between financial institutions that sold the Lime private equity fund with unconfirmed losses and investors will resume next month. With Woori Bank, Busan Bank, and IBK Bank being mentioned, banks are showing signs of heightened tension.

According to the financial sector on the 25th, the Financial Supervisory Service plans to hold a dispute mediation committee meeting for banks that sold Lime funds at the end of next month.

This is a method of post-settlement by applying an estimated loss amount to funds with unconfirmed losses, which was applied to KB Securities at the end of last year.

In principle, compensation for damages can only be made when losses are confirmed through redemption or liquidation of the fund, but since it takes a long time to confirm losses, the Financial Supervisory Service is promoting this method through agreements with sellers.

The most likely candidate is Woori Bank. Woori Bank has the largest sales amount among the eight selling banks, with 357.7 billion KRW in Lime fund sales. The bank agreed to compensate the estimated loss amount and has completed on-site investigations including three-party (Financial Supervisory Service, seller, investor) meetings.

Busan Bank and IBK Bank are also mentioned as candidates. On-site investigations are underway for Busan Bank, and IBK Bank plans to conduct on-site investigations before the Lunar New Year holiday. NH Nonghyup Bank and Gyeongnam Bank are also currently undergoing on-site investigations.

Besides banks, Shinhan Investment Corp. and Daishin Securities are expected to either proceed with voluntary adjustments applying the KB Securities standard or go through separate dispute mediation committees.