Youngpoong and MBK Partners: "Despite the risk of hundreds of billions of won in losses for Korea Zinc, the Choi family has recovered all of its investment"

Youngpoong and MBK Partners said that, after comparing investment flows related to ACG Media, the 2 One Asia Partners funds in which Korea Zinc had invested most of the capital faced a loss risk on their KRW 29 billion investment in ACG Media. They also said they had identified indications that Choi Yun-bum, an inside director at Korea Zinc, and his relatives recovered most of their personal investment after making earlier investments. They said the recovery funds came from ACG Media money, and cited analysis of the registry and records related to ACG Media convertible bonds as supporting evidence.

According to the analysis, Choi Yun-bum and his relatives invested a total of KRW 5.2 billion in ACG Media convertible bonds through private investment associations and other vehicles from 2019 to 2021. Since 2025 and up to recently, Choi Yun-bum and his relatives have received repayments and recovered most of their investment, the analysis showed.

By contrast, the 2 One Asia Partners funds invested a total of KRW 29 billion in ACG Media during the same period, and the capital structure was one in which Korea Zinc had provided most of the funding. Youngpoong and MBK Partners said the funds invested after Choi Yun-bum's earlier investment, and with ACG Media now under financial strain, the 2 One Asia Partners funds' ACG Media investment is effectively facing a risk of being lost in full.

Youngpoong and MBK Partners argued that the point at which Choi and his relatives began recovering their investments overlapped with the period when ACG Media's management difficulties intensified in earnest. ACG Media's expenses exceeded revenue starting in 2024, and as it expanded content production, a structure of accumulated losses became entrenched, after which it posted operating losses for 2 consecutive years.

Youngpoong and MBK Partners also assessed that Choi and his relatives began recovering their investments in earnest from 2025 and ultimately appear to have exited without any meaningful loss. By contrast, they said, the One Asia fund invested in the convertible bonds after Choi and his relatives did, and while KRW 25 billion of that investment was converted into common shares, recovery is currently unclear.

They also explained that Kakao Entertainment invested KRW 50 billion around the same time while valuing ACG Media at around KRW 1 trillion, but as of the end of last year, about 90% of that value had vanished and KRW 45.5 billion had been recognized as a loss in its financial statements, Youngpoong and MBK Partners said. Citing the One Asia fund and Kakao Entertainment cases, Youngpoong and MBK Partners said they stand in contrast to Choi and his side.

Youngpoong and MBK Partners said that, based on the valuation used at the time of Kakao's investment, the value of the ACG Media convertible bonds held by the Choi family was estimated at up to hundreds of billions of won at the time. They also said that hundreds of billions of won in company funds were invested in the Choi family's risky investments, as the largest shareholder family of Korea Zinc.

Youngpoong and MBK Partners went on to claim that, amid ACG Media's management failure making profit realization impossible and the company facing loss risk, there are indications that the Choi family's investment was repaid first with ACG Media funds while Korea Zinc's losses were ignored. They added that this meant the controlling shareholder family's investment was safely recovered, while the company and shareholders were exposed to the risk of losses worth hundreds of billions of won, and stressed that the circumstances require a thorough investigation by the relevant authorities and Korea Zinc's audit committee.

Source: TECHWORLD · Lee Gwang-jae
Original: https://www.epnc.co.kr/news/articleView.html?idxno=406492

References

• https://www.epnc.co.kr/news/articleView.html?idxno=406492