The fiasco surrounding Lime Asset Management is likely to escalate further as investors have filed related complaints and banks which sold its fund options are gearing up to file a lawsuit.

From end-October to Friday, the Financial Supervisory Service received over 100 investor petitions concerning the disputed fund sales by Lime Asset Management, according to the financial watchdog Sunday.

“We are currently looking into individual cases,” said an official of the FSS. “Upon every petition, we are sending inquiries to the corresponding bank which sold the fund options, asking for clarification.”

The list of banks include major lenders here, such as Woori Bank, Shinhan Bank, KEB Hana Bank and NH NongHyup Bank.

In October last year, Lime Asset delayed payments worth 1.5 trillion won ($1.3 billion) on three of its funds -- Tethys II, Pluto FI D-1 and Pluto TF-1 -- citing liquidity shortage. The balance of these disputed funds stood at 438.9 billion won at the end of last year, accounting for nearly 28.2 percent of the total delayed payments. The exact volume of investors’ losses has yet to be determined.

Claiming to have no liability for the capital market law violations, a joint response team -- consisting of 16 banks and brokerages -- is currently working on filing a lawsuit if the FSS investigation finds Lime Asset liable.

Samil PricewaterhouseCoopers, the local unit of the world’s largest accounting firm, is slated to hand over the results to the FSS as early as this month. It was initially due to complete its inspection by November but was held back as Lime CIO Lee Jong-pil went into hiding.

Considering the difficulties, the FSS has decided to dispatch resident examiners to the asset management office to keep track of the ongoing inspection. Once the results are out, the FSS will take actions for the arbitration of disputes.

Amid the prolonged controversy over fund sales, cash inflows into private equity funds have continued to shrink this year. As of Thursday, the volume of active PEFs came to 411.25 trillion won, compared with 412.4 trillion won last year, according to the Korea Financial Investment Association.

By Jie Ye-eun (yeeun@heraldcorp.com)