The Financial Supervisory Service expands inspections of private equity fund (PEF) operators (GPs) to five per year.
Ham Yong-il, FSS capital markets and accounting deputy chief, presided over a briefing on Nov. 28 themed 'achievements and future plans for changes and innovation in the capital market' and noted, "We plan to expand inspections of PEF GPs and also conduct thematic inspections."
Since introducing inspection authority over PEF GPs in October 2021, the FSS has conducted inspections on 18 GPs to date. In particular, it is preparing to strengthen inspections and oversight focused on MBK in relation to the Homeplus incident.
Deputy Chief Ham said, "PEF GPs were in a regulatory gray area in the past, but recently the FSS has been looking into them as it holds inspection authority" and explained, "We plan to look into the impact on the market among other factors."
The FSS plans to differentiate the scope and level of inspections based on investment size, degree of regulatory compliance, and social responsibility. In particular, it will focus on industries related to national key industries or those with many workers or transactions if problems arise.
Deputy Chief Ham said, "We also plan to keep an eye on issues related to insider trading."
The FSS is also expected to reach a conclusion on accounting issues it is investigating related to the MBK and Homeplus incidents in the second half of this year. An FSS official said, "Since potential accounting violations were found at both Korea Zinc and Young Poong, they were previously transitioned to audit, and a conclusion will be reached in some manner by the second half of this year following usual procedures."