As a result of dispute settlement (4 cases) on Pluto TF-1 (trade finance fund) of Lime Asset Management, which had been discontinued, the decision was made to return the entire amount of principal to investors who bought the fund since November 2018.

This is the result of applying the cancellation of the contract by mistake.

It is the first time in a history of dispute settlement in financial investment products that a decision to return 100% of the principal to an investor was made.

The Financial Supervisory Service announced today the results of the Pluto TF-1 Dispute Mediation Committee (subdivision committee) held yesterday (30th).

The Subcommittee decided on canceling the contract by mistake after deliberating four cases that Pluto TF-1 investors selected as a representative case among 108 cases that filed for dispute resolution.

All four cases selected by the Subcommittee are cases of investing in funds since November 2018.

If there was no mistake, it means that the seller has to return the full amount of the principal to the investor, as a serious problem has been discovered so as not to sign a fund signing contract.

"At the time of signing the contract, in the situation where a loss of up to 98% of the (fund) investment capital has already occurred, the manager has misrepresented and misrepresented key information such as the yield and investment risk in the investment proposal." It explained the content as it was, causing an investor's mistake.

The Subcommittee also decided that it was difficult for investors to see that there was negligence given the fact that the opportunity for a reasonable investment judgment was deprived by the seller's explanation of false investment information, discretion of the investor's propensity, and the creation of a loss compensation memorandum.

The 100% principal reimbursement is the highest rate ever.

In the dispute settlement in the DLF situation linked to foreign interest rates, a decision was made to compensate up to 80% of the investment loss.

Mofund, which was operated by Lime Management and called for a repurchase, has pluto, including TF-1, Credit Insured 1, Pluto FI D-1, and Tetis 2, all 4 (173 child funds, 1 It is KRW 670 billion).

Among them, Pluto TF-1 was the first to be classified.

In order to settle the dispute, the loss must be confirmed, because only the current Pluto TF-1 meets this requirement.

Since May 2017, Pluto TF-1 utilizes funds from the Fund and Shinhan Financial Investment's Total Return Swap (TRS) loans to create two International Investment Group (IIG) funds, BAF funds, Barak funds, ATF funds, etc. Invested in 5 foreign trade finance funds.

Of these, there was a problem with the IIG fund.

Lime Management and Shinhan Investment Corp. continued to sell the funds by recognizing the insolvency of IIG funds in November 2018, and changing the way of operation so that the insolvency was not revealed.

Of the 240 billion won in sales of the Pluto TF-1 fund, the amount sold since the end of November 2018 has been around 190 billion won.

Subtracting the repurchased amount so far from 119 billion won sold since the end of November 2018 is 161 billion won (500 individuals, 58 corporations).

An official from the Financial Supervisory Service said, “The investment victims who have invested in Pluto TF-1 since November 2018, but have not been subject to dispute settlement, proceed with autonomous adjustment with the seller according to the decision of the subcommittee.” If this is done, the investment capital of up to KRW 161.1 billion will be returned."

Prior to November 2018, investors (50 billion won) are expected to reach dispute resolution due to incomplete sales.

Excluding pluto TF-1, the three mofunds take time to confirm the loss, and it is unclear when dispute resolution can begin.

The number of dispute settlement applications was 672, including 108 of Pluto TF-1.