Discovery Fund Victims File Dispute Resolution Request with Financial Supervisory Service

Urging a Decision to Cancel the Contract Due to Mistake

[Asia Economy Reporter Park Sun-mi] A total of 125 victims of the IBK Industrial Bank and IBK Investment & Securities Discovery Fund have filed a collective dispute mediation request with the Financial Supervisory Service (FSS), urging a decision to cancel the contract due to mistake.

On the 20th, the Discovery Fund Fraud Victims Countermeasure Committee and the Financial Justice Solidarity held a press conference in front of the FSS, stating, "The 125 victims of the Discovery Fund Fraud Victims Countermeasure Committee have applied for collective dispute mediation with the FSS and urged a decision to cancel the contract due to mistake."

They added, "The victims raised not only the cancellation of the contract due to mistake but also the issue of determining the compensation ratio for incomplete sales during dispute mediation as a preliminary claim," and argued, "The violation ratio of the prohibition of unfair solicitation should be actively reflected in the basic compensation ratio by establishing application cases of the prohibition of unfair solicitation or including the unfair solicitation ratio in the common weighting factors."

Furthermore, they emphasized, "Until now, victims have accepted the 80% upper limit set in private fund dispute mediation, but this was inevitably accepted to avoid prolonged civil litigation," and stressed, "The maximum compensation ratio cap of 80% must be abolished immediately."

The Countermeasure Committee requested the FSS to also consider expanding additional three-party meetings and the selection of representative cases among the victims applying for collective dispute mediation.

They claimed, "At the time of sale, IBK Industrial Bank, as the counterparty to the transaction, made significant mistakes in important parts and sold a risky fund due to the bank’s gross negligence," and added, "Even ordinary people would not have contracted if they had known about the mistake, yet the bank indiscriminately sold this risky fund to their customers."

According to the Countermeasure Committee, the Discovery Fund, which suspended redemptions in February 2019, consists of IBK Industrial Bank Global Bond Fund with 69.5 billion KRW (198 victims), IBK Industrial Bank Real Estate Secured Debt Fund with 21.9 billion KRW (60 victims), and IBK Investment & Securities Short-term Global Bond Fund with 11.2 billion KRW (44 victims).