Prosecution Declines Indictment of Daishin Securities and Former Center Head over 'Lime Fund Redemption Cancellation' Allegations

[Image source=Yonhap News]

[Asia Economy Reporter Song Seung-yoon] Daishin Securities and the former center head, who were accused of canceling redemption orders without the consent of fund subscribers in connection with the Lime Asset Management incident, have been cleared of charges.

According to the legal community on the 28th, the Criminal Division 6 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Kim Rak-hyun) decided not to prosecute Daishin Securities and Jang, the former head of Daishin Securities Banpo WM Center, who were accused of violating the Electronic Financial Transactions Act, due to insufficient evidence on the 22nd.

The prosecution explained, "The suspects requested fund redemptions with the consent of the complainants around October 2019, but later Lime canceled the approval of the redemption request," adding, "It is recognized that the approval for the redemption request was canceled in the Korea Securities Depository's system accordingly."

The law firm Woori, representing the Lime victims, had filed a complaint with the Southern District Prosecutors' Office last year against Daishin Securities and former center head Jang, alleging that Daishin Securities arbitrarily manipulated the system to cancel redemption requests without obtaining consent from fund subscribers.

Meanwhile, former center head Jang was also indicted for incomplete sales of Lime funds and was sentenced to two years in prison in the first trial last year. He is accused of violating the Capital Markets Act, among other charges, by emphasizing uncertain annual returns with terms such as "8% fixed annual interest rate" while hiding the possibility of losses and selling funds worth 248 billion KRW.