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FSS probes Mirae Asset’s ‘illegal’ ABS issuance

[THE INVESTOR] The Financial Supervisory Service, the nation’s financial regulator, has begun a probe into allegations that Mirae Asset Securities engaged in irregular activity while selling asset-backed securities based on its Landmark 72 building in Vietnam.

The FSS said on Aug.30 said it is looking into whether Mirae Asset issued the securities per regulations.

“We began investigations following reports from both the media and parliament,” said one FSS official declining to be identified.

Mirae Asset, which acquired the Landmark 72 building earlier this year, issued the asset-backed securities in July by securitizing Landmark 72. The brokerage was able to raise 250 billion won (US$222.45 million) from the issuance, which offered an annual profit rate of 4.5 percent.

Critics say the brokerage tried to dodge the responsibilities pertaining to public subscriptions by disguising the issuance as a private subscription.

Local laws call for any financial product with 50 or more investors to be classified as a public subscription to become subject to a number of FSS regulations.

Mirae Asset allegedly tried to get around that rule by creating 15 special purpose companies that each attained 49 investors, technically making the issuance a public subscription, according to critics.

By Kim Ji-hyun (
Korea Herald daum