The Financial Supervisory Service launched an open-ended inspection into Mirae Asset Securities over the "SpaceX zero-share allocation" fiasco. In particular, because Chairman Park Hyun-joo of Mirae Asset Group engaged in aggressive promotion even though the amount of SpaceX IPO shares was not firmly set, the Financial Supervisory Service plans to look into internal control issues as well.
According to financial authorities on the 16th, the Financial Supervisory Service is examining Mirae Asset Securities' SpaceX incident without setting an inspection deadline. The Financial Supervisory Service began an on-site check on the 5th after Mirae Asset Securities' domestic IPO subscription effectively fell through, and then shifted to an inspection on the 9th.
The Financial Supervisory Service is looking into why Mirae Asset Securities did not actually receive an allocation of SpaceX IPO shares. Earlier, Mirae Asset Securities took part as a global bookrunner for SpaceX and was expected to receive an allocation of 2.31 million IPO shares, but the domestic IPO subscription was scrapped when filing a securities registration statement became impossible, and in the case of the private placement, the global lead manager Goldman Sachs abruptly canceled the allotment, leaving the firm with not a single share.
In particular, the Financial Supervisory Service plans to examine whether internal controls were inadequate, given that advance promotion was conducted before the IPO share amount was firmly secured. In an interview with a media outlet in April, Park predicted that the SpaceX IPO shares to be allocated later would be substantial and said the firm would give as many investors as possible a chance.
Park currently holds the title of global strategy officer (GSO) under the accountability map. The accountability map is a system that imposes legal responsibility if an executive practically performs or oversees related duties, regardless of whether the role is full-time or legally registered. The system has applied since Jul. last year to large investment firms with assets of 5 trillion won or more. Accordingly, although Park is an unregistered executive, Park could be held legally liable if a financial incident occurs within Park's remit in the future.
Meanwhile, Mirae Asset Securities is reviewing investor compensation. The company said it feels "very regretful and apologetic to customers who trusted the company and subscribed," and noted it is reviewing monetary compensation plans for individual and institutional investors who took part in the subscription. However, the specific size and timing of compensation have not yet been decided. In the industry, given the losses from exchange-rate differences and currency conversion fees, many expect a compensation plan commensurate with those burdens.