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(EDITORIAL from Korea JoongAng Daily on July 8)

National 07:08 July 08, 2020

Clear the Optimus suspicion

High-profile names are being mentioned in the scandalous case of Optimus Asset Management which has unsettled investors by calling a halt to withdrawals of client money invested in funds. The names include a former prosecutor general and deputy prime minister who served as advisers to the fund operator. A former senior presidential staff member is said to have gone to the same university as the fund operator's founder Lee Hyuk-jin, who fled overseas two years ago.

The prosecution has filed for arrest warrants for four executives of the asset management company, including its current CEO. The wife of a board director also worked in the office of President Moon's senior secretary for civil affairs until last month.

According to documents obtained by Rep. Cho Hae-jin, a lawmaker of the opposition United Future Party (UFP), Optimus's founder Lee was implicated in five criminal cases as of 2018. The charges included embezzlement, physical violence, sexual assault and tax evasion. Yet he was able to flee the country in March of that year. He was not banned from leaving the country, which is unusual for a suspect of tax evasion and embezzlement.

According to Rep. Cho, the Financial Supervisory Service (FSS) in 2018 reported to the prosecution about Lee's embezzlement of 7 billion won worth of corporate funds. Despite the seriousness of the finding, the FSS only handed over the findings of its investigation. This also is unusual.

Optimus has more or less committed a fraud scheme. It publicized investment of its funds in bonds of state enterprises, but actually put the money in third-tier lenders or junk-grade companies. Half of the 500 billion won of its assets are unaccounted for in the books. Even if the marketing agents or financial institutions compensate for some of the losses, most investors may not get their money back. The losses would not have snowballed if the authorities had taken stronger action on the company's suspicious business activities.

Lee ran as a candidate for the ruling Democratic Party in the 2012 general election. He failed to get elected, but was recruited as special adviser to then-presidential candidate Moon Jae-in during the campaign that year. It is why Lee's company is suspected to have received special treatment or protection from the Moon administration.

The prosecution must investigate all allegations related to Optimus. High-profile names were also mentioned in the scandal over Lime Fund, but the investigation has not progressed. The prosecution must get to the bottom of the cases before it is too late.
(END)

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