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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Sangjin] A legal dispute between Shinhan Investment Corp. and NH Investment & Securities regarding the German Heritage Fund is expected to intensify soon.
According to the securities industry on the 11th, Shinhan Investment filed an unjust enrichment claim against NH Investment & Securities in July at the Seoul Central District Court. The case is scheduled to proceed once the court sets a hearing date. Currently, the specific schedule for hearings has not been determined.
Shinhan Investment claims that the lawsuit amount is 10 billion KRW, though this could increase during the legal proceedings.
The issue stems from the sale of the German Heritage Fund by NH Investment & Securities between 2017 and 2018. Due to defaults by the German development company, the fund faced delays in redemption, resulting in Shinhan Investment paying a total of 390 billion KRW to investors.
The German Heritage Fund was an investment product that involved remodeling old buildings such as castles, monasteries, and hospitals into residential units for sale or lease to recover investment funds.
However, the project's real estate development was affected by defaults by the German developer, German Property Group, leading to increased risk of principal loss. In December 2022, the Financial Supervisory Service (FSS) ruled for the cancellation of contracts due to errors.
Under this decision, the banks or securities firms that sold the fund are responsible for returning funds to investors, with the sellers expected to pursue legal claims against the fund issuer.
NH Investment & Securities maintains that it only issued derivative-linked securities (DLS) for the fund and that Shinhan Investment was responsible for deal sourcing. Deal sourcing refers to identifying and selecting suitable investment targets that align with the fund's investment strategy.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
