Lime Asset Management declared bankrupt and redeemable rate at 3%

Lime Asset Management, which caused losses worth 1.7 trillion won ($1.4 billion) after suspending redemption, has been declared bankrupt, and its remaining assets will be liquidated for distribution to creditors by state-run Korea Deposit Insurance Corp. (KDIC).

The Seoul Bankruptcy Court on Thursday upon declaring bankruptcy deemed debt would exceed reported 520 billion to overwhelm assets of 19 billion won by tens of times and authorized KDIC to liquidate the fund.

Creditors can file for their credit with the bankruptcy court by April 29. KDIC will verify them to set redeemable figure.

The recovery rate would likely stop at 4 percent, and given the time for asset liquidation, it may take years for creditors to redeem some of their liabilities.

A total of 4,035 individuals and 581 corporations have been affected.

Lime Asset Management, once with 5 trillion won in capital, concealed massive losses from its overseas trade finance funds. The hedge fund instead kept up illegal means to sustain business. When a Kosdaq-listed company it invested in also incurred losses, it purchased unlisted private equity bonds through another fund and then purchased insolvent bonds from the Kosdaq-listed company.

The former vice president of Lime Asset Management was sentenced to 15 years in prison and a fine of 4 billion won, while CEO Won Jong-jun was sentenced to three years and a fine of 300 million won on charges of bribery, fraud, and violation of the Capital Market Act.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]