The prosecution investigating the Discovery Fund case, which caused a large-scale suspension of redemptions in 2019, has refiled an arrest warrant for Jang Ha-won, CEO of Discovery Asset Management. This comes about two months after the previous warrant was dismissed.
On the 22nd, the Financial and Securities Crime Joint Investigation Unit of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Ha Dong-woo) announced that they refiled arrest warrants yesterday against CEO Jang and former Head of Investment Division Kim on charges of violating the Capital Markets Act and bribery under the Act on the Aggravated Punishment of Specific Economic Crimes.
According to the prosecution, CEO Jang and others are accused of receiving approximately 109 billion KRW in investment funds from Discovery Fund investors through false statements regarding important matters from August 2018 to April 2019. They are also charged with operating funds through Discovery Investment without registration as a collective investment business from January 2016 to January 2019, and obtaining private illicit gains from companies in which the fund invested.
Additionally, the prosecution filed an arrest warrant against Mr. A on charges of violating the Attorney-at-Law Act and bribery under the Act on the Aggravated Punishment of Specific Economic Crimes. Mr. A is suspected of mediating and soliciting favors related to the affairs of employees at a district office in Seoul or local public enterprises concerning a real estate development project partially invested in by Discovery Asset Management. He is also accused of receiving money and valuables from business operators related to the real estate development project from 2017 to July 2019 under the pretext of mediating matters related to the duties of Discovery Asset Management employees.
The pretrial detention hearings (warrant substantive examinations) for these individuals are scheduled to be held at 2 p.m. on the 24th at the Seoul Southern District Court.
Previously, in September, the prosecution filed arrest warrants for CEO Jang and two other Discovery Asset Management officials, but the Seoul Southern District Court dismissed all the warrants, citing reasons such as "there is room for legal dispute regarding some charges and insufficient evidence to guarantee the defendant's right to defense." The charges listed in the warrants at that time included fraudulent unfair trading under the Capital Markets Act, unregistered financial investment business, breach of trust, and bribery under the Act on the Aggravated Punishment of Specific Economic Crimes.
The prosecution is investigating whether there was any illegality in the fund management process by CEO Jang and others. In July, the prosecution conducted raids on Discovery's office and the Seoul Housing and Communities Corporation (SH), and on August 31, they summoned CEO Jang for questioning.
Meanwhile, separately, CEO Jang and others were indicted on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes related to the suspension of redemptions, but were acquitted in the first trial in December last year. The case is currently undergoing a second trial following the prosecution's appeal.
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