For Alleged Failure to Inform Investors of Risks of Fund Products
Redemption of 48 billion won worth of funds sold by KB Securities and Shinhan Securities was suspended. Investors are claiming that the two companies failed to inform them of the risks of the fund products.
The funds, dubbed Fortkorea Green Energy Nos. 1-4, were created by Fortkorea Asset Management, a Korean asset management company, between September 2018 and July 2019 for investment in a renewable power generation plant in the United Kingdom. The fund products expired in June, but redemption was suspended from March 2022.
Fortkorea Asset Management planned to invest investors' money in a waste incineration power plant project in Peterborough of the United Kingdom. Yet, the project did not proceed as planned as the company in charge of constructing the power plant had problems due to poor management. Consequently, the investment principal and interest were not paid at the maturity of the funds.
Investors are claiming incomplete sales by KB Securities and Shinhan Securities, asserting that the asset management company and the fund sellers told them, when selling the fund products, that principal payment is guaranteed by insurance.