Lime Asset Management, with 1.6 trillion KRW redemption suspension, files for bankruptcy in court

[Asia Economy Reporter Bae Kyunghwan] Lime Asset Management, which caused a fund redemption suspension scandal involving approximately 1.6 trillion KRW, has filed for bankruptcy with the court.

According to the legal community on the 18th, Lime Asset Management submitted a bankruptcy petition to the Seoul Bankruptcy Court on the 7th. The first hearing is scheduled for today, the 25th, and will be presided over by the Seoul Bankruptcy Court Rehabilitation Division 15 (Chief Judge Jeon Daegyu). If the court declares bankruptcy on this day, a bankruptcy trustee will be appointed to distribute the company's assets to creditors.

Lime Asset Management invested in five overseas trade finance funds, including the International Investment Group (IIG) fund, starting in May 2017, using fund investment money and total return swap (TRS) loans from Shinhan Financial Investment. However, as the funds became insolvent, the company declared a suspension of redemptions to investors in 2019, freezing investment funds totaling 1.6 trillion KRW.

However, former Vice President Lee Jongpil and former CEO Won Jongjun, among the management, were prosecuted on charges of illegal activities during the sale and management of the funds, such as concealing fund insolvency and continuing to attract investments. They were sentenced to prison in the first trial and are currently undergoing the second trial. In addition, Kim Bonghyun, chairman of Star Mobility and a key figure in the case, is currently undergoing his first trial at the Seoul Southern District Court.