Shinhan Securities Gives Up Appeal Over Lime Mismanagement... 50 Million Won Fine Likely

Shinhan Investment Corp., a corporation prosecuted for negligence in supervisory duties related to the sale of Lime Asset Management (Lime) funds, has withdrawn its appeal against the first-instance fine.

According to Shinhan Investment Corp. on the 3rd, the company submitted a withdrawal of appeal to the court on the 29th of last month. This came just one week after filing an appeal against the first-instance ruling on the 22nd of last month. The prosecution did not file a cross-appeal. Accordingly, the first-instance ruling is expected to be finalized as is.

On the 15th of last month, Judge Lee Geun-su of the Criminal Division 3 at the Seoul Southern District Court sentenced Shinhan Investment Corp., accused of violating the Capital Markets and Financial Investment Business Act (Capital Markets Act), to a fine of 50 million KRW.

Shinhan Investment Corp. is accused of neglecting its duty of care and supervision while Im, the former head of the PBS Business Division, concealed fund insolvency and sold 48.2 billion KRW worth of overseas trade finance funds to investors.

The prosecution first prosecuted former head Im, who faced charges including incomplete sales, and then indicted Shinhan Investment Corp. in January 2021, recognizing the failure to fulfill supervisory duties. This applied the joint penalty provision for Im’s fraudulent unfair transactions and unsound business practices. The first-instance court acquitted the company on the unsound business practices charge but found it guilty only on the fraudulent unfair transactions charge.

[Photo by Shinhan Financial Investment]

Meanwhile, in the 2019 'Lime Incident,' the prosecution indicted three securities firms?Daishin Securities, KB Securities, and Shinhan Investment Corp.?under joint penalty provisions for negligence in supervisory and care duties toward their employees. KB Securities was fined 500 million KRW, and Daishin Securities was fined 200 million KRW.

Immediately after the trial, all three securities firms filed appeals. However, with Shinhan Investment Corp. now withdrawing its appeal, only KB Securities and Daishin Securities remain in the second-instance trial process.