By Yoon Ja-young
Staff Reporter
The Financial Supervisory Service (FSS) has launched a probe of Mirae Asset Investments, the asset management arm of Mirae Asset. The regulator is scheduled to look into other financial institutions as well to check for irregularities regarding fund sales.
The FSS said Sunday that it started probing Mirae Asset Investments last week, the first comprehensive audit in three years. Its subsidiaries overseas, including the one in London, are also undergoing investigations.
The asset management company has been a major influence on the capital market amid the paradigm shift from bank savings to fund products. It manages one third of the equity funds investing in the local stock market as investors are drawn to its good investment return. It has 45.9 trillion won in funds under its management as of Dec. 5, which is 2.6 times what it had a year ago.
But concerns have arisen over the overheating Mirae Asset syndrome. ``Insight Fund,'' a global swing fund launched by the asset management company in October, drew some 4.5 trillion won despite the global stock market turmoil following the U.S. subprime mortgage crisis, however, it has been recording losses since then.
The financial regulator plans to carry out an overall probe, to check for irregularities in fund management and sales. Mirae Asset has also been suffering from rumors about its fund managers' front-running. The regulator is likely to check this allegation as well.
With the fund market going through explosive growth, the regulator plans to probe other financial institutions as well. Those that sell fund products will be questioned over whether they followed appropriate procedures in selling funds. There have been complaints from customers that they haven't gotten enough information regarding the fund from the sellers prior to the investment.
``We will see whether they gave incorrect fund information or groundless data. We will also check to see whether they recommended fund products that were too risky compared with their investment objective and financial conditions,'' said FSS Assistant Governor Jung Yong-sun in a radio interview.