Large-scale lawsuits set to test Mirae Asset's capacity

Mirae Asset Securities headquarters in Seoul / Courtesy of Mirae Asset Securities

By Park Jae-hyuk

Market insiders' attention is focused on whether Mirae Asset Securities will win the two forthcoming large-scale lawsuits involving its foundered alternative investments, as its asset management affiliate defeated China's Anbang Insurance Group last year in litigation over a canceled acquisition of luxury hotels worth $5.8 billion won in the United States.

Mirae Asset will face a 90 billion won lawsuit alongside NH Investment & Securities later this month from multiple institutional investors that used the securities firms to invest in the Drew Las Vegas construction project, which ultimately resulted in up to 300 billion won ($265 million) in losses to Korean individual and institutional investors earlier this year.

The institutional investors are alleging Mirae Asset and other securities firms, which had organized a consortium in 2018 for making mezzanine and equity investments in the project, conducted mis-selling as they failed to inform investors of certain risks.

Foreign attorney Lee Yoon-suh of the law firm LIN, which represents the plaintiffs, said the firm is considering joining hands with individuals who invested in the project through Shinhan Financial Investment.

Mirae Asset is also tasked to cope with a lawsuit over a 250 billion won deposit the securities firm and HDC Hyundai Development Company had paid before the rupture of their takeover of Asiana Airlines from Kumho E&C.

Kumho and Asiana filed a lawsuit last December asking the court to allow them not to return the money to HDC and Mirae Asset from the escrow account. Mirae Asset will be able to get back 50 billion won if it wins the lawsuit.

The trial will begin June 10 at the Seoul Central District Court. The plaintiffs hired Shin & Kim and Yoon & Yang, while the defendants hired Yulchon and Lee & Ko.

“It is true that the litigation costs are quite high,” a Mirae Asset official said. “However, we also have enough evidence to refute the plaintiffs' arguments.”