[비즈한국] A multi-billion won breach of trust case has occurred at Hanyang Securities001750. In the process of reviewing its real estate project financing (PF) operations, Hanyang Securities confirmed a 3.5 billion won breach of trust by a former executive and filed a criminal complaint. With employee misconduct surfacing repeatedly over the past few years, concerns are growing that the firm's internal control system is failing. As KCGI, an activist fund, has taken over as the largest shareholder, eyes are on whether Hanyang Securities can successfully overhaul its organizational culture and strengthen internal controls, which have emerged as key priorities.
On the 13th, Hanyang Securities announced that it had filed a criminal complaint against a former executive for a breach of trust that occurred during their tenure in 2021. The individual, identified as Mr. Park, was a non-registered executive with the rank of director equivalent. The amount involved in the breach of trust reached 3.5 billion won, which is 0.68% of Hanyang Securities' equity capital (514.1 billion won) as of 2024.
This incident came to light while Hanyang Securities was reviewing its business processes related to real estate project financing (PF). The company explained, "We confirmed the breach of trust while operating a task force to review the actual state of all real estate PF operations and improve the system. We have completed disciplinary actions against the involved individual according to our internal control principles and filed the complaint to clarify where accountability lies."
Regarding the financial damage caused by the breach of trust, the company stated, "We have already set aside a sufficient level of loan-loss provisions, so there is no structure requiring us to recognize additional losses. The possibility of further financial loss is limited," adding, "We will strictly respond according to our principles against any acts that undermine the trust of shareholders and stakeholders."
The problem is that this is not the first time Hanyang Securities has faced employee misconduct, including breach of trust and embezzlement. In November 2025, it was revealed that an employee handling real estate PF had used internal information to gain unfair profits, leading to sanctions from financial authorities. According to the Financial Supervisory Service (FSS), Executive A, who oversaw real estate PF financial advisory and arrangement services, used non-public information about real estate development projects between 2020 and 2022 to arrange service contracts between their family-owned company and project developers, pocketing billions of won in fees. While working in fund investment, Executive A also received a leased vehicle for their father's personal use from an asset management firm employee and violated dual employment restrictions by running a real estate consulting firm while serving as a full-time executive at Hanyang Securities.
Other incidents include Employee B, who handled real estate PF financial advisory and lending, using development project information in 2020 to invest in a company established for the developer’s fundraising under a borrowed name, and Employee C, who used similar tactics to Executive A in 2022 to arrange service contracts between companies and pocket 16 million won in fees.
Following a special inspection in October 2022, financial authorities uncovered these facts and imposed an institutional warning and a 40 million won fine on Hanyang Securities. Five employees involved in illicit profit-taking received various disciplinary measures, including reprimands, dismissal, 6 million won in fines, pay cuts, three-month suspensions, and official admonitions.
Hanyang Securities previously filed a criminal complaint against an executive for breach of trust in April 2023. The individual was Mr. Min, once known as the youngest executive for his performance in real estate PF investment, who was accused of a 2.15 billion won breach of trust. The amount related to Mr. Min was increased by an additional 320 million won in October 2025, bringing the total to 2.47 billion won.
With multi-billion won breach of trust and embezzlement cases continuing to surface, Hanyang Securities has faced criticism that its internal control system is not functioning properly. Even in the case of unfair profit-taking involving real estate PF, the FSS issued a management caution, ordering the firm to strengthen internal controls. At the time, the FSS pointed out that Hanyang Securities lacked clear standards for real estate PF fees, proper oversight and management systems, and a regular reporting framework.
The new owner, KCGI, is also focusing on restructuring the business and strengthening internal controls to boost competitiveness. Hanyang Securities' largest shareholder changed from Hanyang Academy to KCGI (29.59% stake), an activist fund, in June 2025. After a half-year review process by authorities, KCGI received approval to change the major shareholder and has set a goal to grow Hanyang Securities into a mid-sized brokerage with an annual ROE of over 10% and equity capital exceeding 1 trillion won. KCGI Vice Chairman Kim Byung-chul, who became the CEO of Hanyang Securities after the acquisition, stated at a town hall meeting in January, "We are simultaneously pursuing internal control and system restructuring alongside risk management sophistication to leap into a mid-sized securities firm."
Hanyang Securities stated that it has revamped internal control procedures and completed institutional improvements to prevent the recurrence of such incidents. A company official said, "We have established guidelines for handling real estate PF fees in accordance with the management cautionary notices regarding internal controls. We operate a procedure to pre-review the appropriateness of fees and potential legal violations through an internal legal review system. Post-event, we have established SPC operating guidelines and are implementing recurrence prevention measures, such as regular inspections by our internal control department."