Concerns have been raised over inadequate supervision by financial authorities regarding the recurrence of an incident in which Mirae Asset Securities failed to receive a single share in the Space X IPO subscription last June.
At the National Assembly's Political Affairs Committee audit of the Financial Services Commission held on the 8th at the National Assembly building in Yeouido, Seoul, People Power Party lawmaker Park Seong-hoon stated, "Mirae Asset Securities deposited over 1 trillion won as collateral for the IPO subscription, yet was allocated '0 shares.' Mirae Asset Securities served as a joint lead underwriter, but did not receive a single share, while all 13 co-managers received (IPO) allocations."
Park (Rep.) criticized both Mirae Asset Securities' investor protection measures and the financial authorities' supervisory system. Park (Rep.) argued, "There is a problem with selling products whose allocation probability is uncertain as if they were confirmed quantities." He added, "During the process of depositing collateral for the IPO subscription, funds were tied up for an average of 5.3 days, incurring exchange costs. Furthermore, because the exchange rate fell during this period, investors also suffered foreign exchange losses."
Park (Rep.) raised issues regarding the fact that the Financial Supervisory Service failed to prevent the "IPO non-allocation" incident despite immediately launching an on-site investigation at the time of the initial non-allocation. He stated, "They began an on-site inspection and yet accepted a second subscription three days later. How is this possible?" He added, "This scene clearly exposes flaws in investor protection principles and the supervisory system."
Following this, Park (Rep.) emphasized, "It is necessary to comprehensively re-examine whether it is appropriate for securities firms to collect tens of billions of won in advance without knowing the actual quantity they will secure, and how investor protection mechanisms should be established for overseas non-listed stock subscriptions or brokerage."
Financial Services Commission Chairman Lee Eui-yeon stated, "The Financial Supervisory Service is currently investigating the facts and detailed circumstances," adding, "Corresponding measures must be taken based on the results."
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