South Korea’s PPP Weighs Calling Mirae Asset Chairman in Single-Stock Leveraged ETF Probe

PPP to submit request for parliamentary probe on Sept. 3

South Korea’s People Power Party, which is pushing for a parliamentary investigation into single-stock leveraged exchange-traded funds, plans to call Mirae Asset Financial Group Chairman Park Hyeon-joo as a witness if the probe goes ahead.

The party plans to submit a request to the National Assembly on Sept. 3 for an investigation into allegations surrounding the introduction of single-stock leveraged ETFs tied to Samsung Electronics and SK Hynix. An official with the National Assembly’s Political Affairs Committee said Park would be asked to appear if the investigation proceeds.

The PPP alleges that former presidential policy chief Kim Yong-beom, who pushed for the introduction of the products, met Park at a hotel in Seoul. It says investigators need to examine whether there was collusion with firms including Mirae Asset Global Investments during the rollout process.

Rep. Seo Il-jun, the opposition floor member on the Political Affairs Committee, told a news conference that estimated losses suffered by retail investors from single-stock leveraged ETF investments have reached about 54 trillion won ($39 billion). He said the investigation should clarify how the policy was decided and who was responsible. If serious legal violations are confirmed, the party will also pursue a special counsel probe.

Seo said Kim and the son of Lee Chan-jin, chief of the Financial Supervisory Service, are known to have worked at Mirae Asset Global Investments. He also cited allegations that Kim met with the chairman of a financial company. The party must determine clearly whether the policymaking process involved any potential conflict of interest, he said.

A parliamentary investigation would require agreement from the Democratic Party. A PPP official said the party would continue pressing the issue, including by demanding a special counsel investigation, if the parliamentary probe does not move forward.

Esther Lee, Hankyung.com reporter esther@hankyung.com