Seoul, Nov 10 Hana Bank, a major commercial bank in South Korea, has been fined nearly 18 billion won ($12.3 million) for selling private funds to investors without properly explaining the associated risks, industry sources said on Monday.
The Financial Supervisory Service (FSS) imposed a fine of 17.94 billion won on the bank for mis-selling nine types of private funds that invested in overseas loan bonds and similar assets, including those in Italy and Britain, to a total of 963 investors between 2017 and 2019, reports Yonhap news agency.
While selling the products, which had a combined sales volume of 377.9 billion won, the bank had allegedly distorted or omitted key information, violating its duty to explain investment risks, according to the sources.
Hana Bank had allegedly concealed the risk of investment losses and misrepresented the product structure, leading investors to believe they could safely recover both principal and interest, as if the products were guaranteed.
In addition to the corporate fine, the FSS also imposed disciplinary actions, including reprimands and pay cuts, against about 10 bank officials, the sources added.
Meanwhile, South Korean shares shot up nearly 3 per cent late on Monday morning as investors expressed hope over the government's push to reform dividend tax policies to encourage listed firms' payouts.
The benchmark Korea Composite Stock Price Index (KOSPI) had gained 114.08 points, or 2.89 percent, to 4,067.84 as of 11:20 a.m.
On Sunday, the government and the ruling Democratic Party agreed to push for lowering the top tax rate on dividends from the initially proposed 35 per cent.
The move follows a government tax revision proposal in July, which suggested separate taxation for dividend income in a bid to encourage dividend payouts and boost the stock market.
Financial companies sharply gained ground, with KB Financial rising 4.53 per cent and Shinhan Financial moving up 2.71 per cent.
Market bellwether Samsung Electronics added 2.45 per cent, and its chipmaking rival SK hynix surged 5.86 per cent.
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