[Asia Economy Reporter Park Jihwan] The dispute resolution between financial companies that sold Lime private equity funds with unconfirmed losses and subscribers is expected to accelerate. As the first case, KB Securities reached a compensation agreement for the unconfirmed loss Lime fund, which is likely to give momentum to dispute resolutions for other sellers. Financial authorities plan to complete dispute resolutions by next month for some banks, including Woori Bank, which have expressed their intention to participate and completed on-site investigations.
According to financial authorities on the 28th, recently KB Securities and three investors accepted the compensation plan proposed last month by the Financial Supervisory Service's Dispute Mediation Committee (Dispute Committee). KB Securities is expected to proceed with damage compensation for other investors through a voluntary adjustment method based on the compensation standards proposed by the Dispute Committee. Previously, the Financial Supervisory Service held a dispute committee for KB Securities, which was the first to agree to the post-settlement method, and proposed a mediation plan to compensate investors from 40% to 80%.
According to the principle of dispute resolution, compensation is possible only when losses are confirmed through redemption or liquidation of the fund. However, it is pointed out as a drawback that it takes at least 3 to 5 years until the loss is confirmed. The financial authorities' policy is to promote dispute resolution based on estimated loss amounts if the financial company agrees to the post-settlement method, even if the loss is not confirmed. Victims are compensated first at the rate set by the Dispute Committee, and additional recovery amounts are settled afterward.
With KB Securities' case being the first to promote compensation for unconfirmed loss Lime funds, dispute resolution for the remaining 14 sellers is expected to gain momentum. Currently, the Financial Supervisory Service is promoting dispute resolutions for Woori Bank, which agreed to estimated loss compensation and completed on-site investigations, as well as Busan Bank, which is currently under investigation, and IBK Industrial Bank, scheduled for investigation early next month. A Financial Supervisory Service official stated, "For some banks including Woori Bank, the goal is to promote dispute resolution by the end of February."
Besides banks, Shinhan Financial Investment and Daishin Securities are expected to either proceed with voluntary adjustments applying KB Securities' standards or go through separate dispute committees. The official said, "Whether the seller agrees is the most important factor in dispute resolution for unconfirmed losses, and if the seller agrees, we are proceeding with related procedures as quickly as possible. However, except for KB Securities, no securities company has officially expressed their intention to participate yet."
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