Opposition political parties chastised the country's financial regulator for failing to prevent controversial hedge funds from freezing withdrawals of massive investments and causing more than two trillion won in financial losses.
At a parliamentary audit of the Financial Supervisory Service(FSS) on Tuesday, the main opposition People Power Party(PPP) suggested that the now-defunct asset management firms' collusive ties with the ruling camp led to the FSS' lax supervision.
The PPP raised allegations that the FSS neglected to prevent the Optimus scandal, despite classifying the management firm as improperly run following the Lime scandal.
The main opposition also suspected the FSS of offering favors to Optimus while delaying action on its capital shortage.
FSS Governor Yoon Suk-heun, meanwhile, denied the allegations, saying that the regulator is not at all influenced by the presidential office in carrying out its duties.
Amid financial fraud investigations, the operations of the 520-billion-won hedge fund Optimus Asset Management were suspended in June this year, causing losses to one-thousand-166 individuals and institutional investors.
Also mired in controversy is Lime Asset, the country's once-largest hedge fund, which suspended redemptions amid a probe into its investments earlier this year.