Prosecutors Indict Current and Former Executives of Fidelis Asset Management Without Detention for 'Fund Mis-selling'

Former and current Fidelis executives indicted without detention
Shinhan Bank not prosecuted due to lack of evidence

Former and current executives of Fidelis Asset Management, suspected of mis-selling private equity funds worth around 180 billion KRW, have been indicted without detention.

The Criminal Division 5 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Jo Jae-cheol) announced on the 22nd that on the 15th, three individuals including former Fidelis CEO Jang were indicted without detention on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud) and others. They are accused of falsely stating important matters related to the fund's profit structure in the product prospectus and using it to sell the fund.

Since 2019, Fidelis operated the Fidelis Fund, which invested in confirmed trade receivables of overseas trading companies. However, due to difficulties in trade caused by the COVID-19 pandemic, the fund suspended repayments at its maturity dates in February and June 2021. As a result, investors who suffered losses filed complaints and accusations against the asset management company and Shinhan Bank, the fund distributor, with the police in September 2022. At that time, Shinhan Bank sold funds worth approximately 180 billion KRW to about 380 customers, with the amount reported to the police reaching 9.6 billion KRW.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency transferred the case to the prosecution in January last year. The Southern District Prosecutors' Office, which received the case, requested a reinvestigation from the police and continued the investigation. However, Shinhan Bank, which sold the Fidelis Fund, was not prosecuted due to insufficient evidence.