Shilla Asset and Zenis Investment Receive Maximum Penalty for IPO Proxy Subscription Fraud... Expelled from Market

Shilla Asset Management and Zenis Investment Advisory have received the most severe penalty—the cancellation of their licenses and registration to operate in the financial investment business—after being found guilty of embezzling investors’ funds under the pretense of proxy subscribing for initial public offerings (IPOs).

The Financial Services Commission made this decision at its 16th regular meeting on September 23. In addition, it demanded the dismissal of both companies’ former and current executives and imposed fines and penalties.

According to the Financial Supervisory Service's investigation, Shilla Asset Management was found to have not conducted licensed business operations and violated the requirement to maintain minimum equity capital, resulting in the cancellation of its licenses for public collective investment business and registration for general private collective investment business. The company was also fined 1,494 million won for disclosing business reports that violated accounting standards and failing to disclose and report material management situations. Furthermore, a penalty of 20 million won was imposed for violating restrictions on credit offering to major shareholders, and former executives who breached disclosure obligations were also subject to a request for dismissal.

The financial authorities stated that they plan to strictly supervise compliance within the asset management, investment advisory, and discretionary investment sectors to maintain market order and support growth based on investor trust, and will rigorously enforce post-violation sanctions.

This content was produced with the assistance of AI translation services.