Hana Bank for incomplete sales of private equity funds, partially suspending business, sanctioned for 3 months

▲ Financial Supervisory Service
Seoul Newspaper DB

The Financial Supervisory Service’s Sanctions Review Committee imposed a three-month sanction on Hana Bank for partially suspending business in relation to incomplete sales of various private equity funds such as lime. The Financial Supervisory Service held a sanction trial on the 27th and deliberated on measures to be taken as a result of a comprehensive inspection of Hana Bank. The Financial Supervisory Service held a sanction trial in July and December last year, but failed to reach a conclusion.

Hana Bank sold 87.1 billion won worth of lime funds between 2017 and 2019. During the same period, it also sold 110 billion won in Italian health care funds and 40 billion won in German heritage funds, which caused controversy over incomplete sales and redemption. In this sanction review, along with Lime Fund, 11 types of private equity funds including Italian Healthcare, German Heritage, and Discovery were deliberated on incomplete sales.

In relation to this, the sanction review judged the incomplete sale of private equity funds as a violation of the Capital Market Act, and decided to propose to the Financial Services Commission a three-month suspension of business and a fine for negligence at Hana Bank. In addition, the relevant executives and employees were reprimanded and removed from their jobs. The dismissal of executives and employees is a measure taken by the FSC, and the FSS plans to recommend it to the FSC.

However, in this sanction review, violations of the obligation to establish internal control standards related to CEO sanctions were not considered. In this regard, Jeong Eun-bo, head of the Financial Supervisory Service, said last month, “I understand that there is no discussion regarding sanctions on him because it is not a matter to be held accountable for.”

Previously, the Financial Supervisory Service issued a warning to Hana Bank, which was at the level of severe punishment, by asking about responsibility for incomplete sales, and a censure warning to Vice Chairman Ji Seong-gyu, who served as the head of Hana Bank at the time of selling the lime fund.

By Hong In-ki



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