FSS likely to take Tong Yang complaints as collective request

 The financial regulator will likely take individual complaints from Tong Yang Group investors as a collective request as part of its probe into the cash-strapped conglomerate, its officials said Tuesday. The Financial Supervisory Service (FSS) is widely expected to accept the representative claim lodged by more than 600 retail investors seeking compensation for the losses from the default of Tong Yang Group, its officials with knowledge on the matter said. The decision, scheduled to be made final at a regular FSS meeting later in the day, came as the liquidity crisis of South Korea's 38th-largest conglomerate has left tens of thousands of smaller investors to lose their sizable savings. Tong Yang Group filed for court receivership for five of its units late last month after failing to repay some of its massive debts, worth 110 billion won (US$102.9 million) that came due at the end of September. According to local consumer advocate group Korea Financial Consumer Agency, about 45,000 individuals have invested in Tong Yang affiliates' debts such as commercial papers. The collective request will be the first of its kind accepted by the regulator since the FSS launched such a system early this year aimed at bolstering consumer rights for individual financial investors. Under what is dubbed by the FSS a "civil request system," 200 or more consumers as a collective unit can lodge a complaint with the regulator in the form of a class action and ask to pursue an investigation into the suspected financial company. The FSS is to hold a review committee meeting to make a final decision on whether to take the Tong Yang complaints as its first official civil request. It will be run as a separate case on top of the ongoing FSS probe into the Tong Yang units. Meanwhile, South Korea has seen a rapid fall in the daily turnover of corporate bonds since the Tong Yang crisis, FSS data showed, with the figure plunging 45.3 percent to 521.4 billion won on average from 952.5 billion won in the last two weeks.