Photo = Mirae Asset Securities

 

[Alpha Biz= Paul Lee] The appellate court hearing in the damages lawsuit stemming from the Lime Asset Management redemption suspension scandal is set to begin next month, as legal battles between major financial institutions resume.

According to legal sources on April 1, the Seoul High Court has scheduled the first hearing of the second trial for May 27 in the case filed by Mirae Asset Securities against Shinhan Investment Corp and others, including former Lime Asset Management Vice President Lee Jong-pil.

The lawsuit stems from compensation paid by Mirae Asset Securities to investors following the Lime fund crisis. The firm subsequently filed a KRW 9.1 billion damages claim in April 2021, arguing that Shinhan Investment, which provided prime brokerage services (PBS) to Lime Asset Management, played a role in the losses.

The Lime scandal erupted in 2019 when the asset manager concealed fund losses and continued selling products through securities firms and banks, leading to a massive KRW 1.67 trillion redemption suspension. Lime Asset Management later had its license revoked in 2020 and was declared bankrupt by a Seoul court in 2022.

In the first trial, the Seoul Southern District Court partially ruled in favor of Mirae Asset Securities. The court ordered Shinhan Investment and Lime Asset Management to jointly compensate Mirae Asset approximately KRW 9.08 billion plus interest. Litigation costs were split, with 30% borne by Mirae Asset and 70% by Shinhan and other defendants.

Both parties appealed the ruling, bringing the case back to court roughly one year and three months after the initial verdict.

Separately, Hana Bank also partially won a similar damages lawsuit earlier this year against Shinhan Investment and Lime Asset Management.

The upcoming appellate proceedings are expected to further clarify liability among financial institutions involved in one of South Korea’s largest fund scandals.

 

 

 

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