SEOUL– An entrepreneur at the center of a 1.7 trillion-won (US$1.3 billion) hedge fund fraud scandal was sentenced to 30 years in prison Thursday for massive embezzlement.
Kim Bong-hyun, the former chairman of the small industrial robot manufacturer Star Mobility, was the main financial resource for Lime Asset Management Co., a now-defunct asset management firm.
Lime Asset was accused of selling and running fraudulent financial products that eventually resulted in the suspension of fund redemption amounting to an estimated 1.7 trillion won.
The Seoul Southern District Court found Kim guilty of stealing 40 billion won worth of Lime Asset funds invested in Star Mobility, and other assets from multiple companies to pay off his personal debt. The total embezzlement amounted to 130 billion won.
The court also ordered the disgraced businessman to forfeit 76.9 billion won.
After being released on a bail during trials, Kim fled after cutting off his ankle bracelet in November last year. Amid rumors he could have smuggled himself into China on a boat, he was arrested in South Korea the following month.
The court said a heavy punishment is inevitable as Kim had committed the crime repeatedly and even escaped to avoid punishment for the crime that has caused huge losses to investors.
Lime Asset, founded in 2012, was once the country’s largest hedge fund with 5.7 trillion won in assets.
Source: Yonhap News Agency