Lime Asset Management hid fund losses with 'parking trades' — then froze ₩1.6T

Lime Asset Management grew from a small Korean fund manager into the country's largest hedge fund house by 2019, managing nearly 6 trillion won on promises of 5–8% annual returns. Its funds bought heavily into mezzanine debt and convertible bonds of struggling KOSDAQ-listed companies — assets with little genuine liquidity — and used total return swap (TRS) leverage with Shinhan Investment & Securities, KB Securities and Korea Investment & Securities to amplify the bet.

To keep reporting the returns it had promised, Lime is alleged to have run 'parking transactions' — buying bonds in the name of other entities to dodge single-holder ownership limits — and to have papered over losses in one fund by shifting money in from another. When the underlying KOSDAQ share prices crashed in mid-2019, the illiquid assets could not be sold to meet redemptions, and in October 2019 Lime suspended redemptions on funds holding roughly 1.6 trillion won of investor money.

Regulators found the distributing banks — Woori Bank, Hana Bank, Mirae Asset Securities among them — had sold the funds without adequately disclosing the risk, and the Financial Supervisory Service ordered full principal compensation for post-2018 sales. Vice president Lee Jong-pil was arrested in April 2020 after being found hiding with over 6 billion won in cash. Litigation followed for years: as recently as February 2026, Seoul courts were still allocating damages between Lime, Shinhan and the banks that sold the funds, with individual investors' own suits still losing on appeal.