MBK Partners and Youngpoong claimed that the two sides exchanged discussions in which they valued Ark Media at 1 trillion won and pursued a 50 billion won investment by Kakao Entertainment, and that the actual transaction subsequently proceeded under similar terms. Controversy is expected to arise over whether this transaction, combined with KoreaZinc Chairman Yoon Choi’s prior investment in Ark Media, poses a potential conflict of interest.
MBK and Youngpoong issued a statement on the 2nd, revealing that One Asia Partners and Kakao Entertainment discussed a plan in June 2022 to link the investment in Graygo with the investment in Ark Media. According to MBK and Youngpoong, the discussions at that time included a proposal to reinvest 50 billion won in Ark Media in exchange for a 100 billion won investment in Graygo.
According to the statement, the two sides also discussed a plan to value Ark Media at 1 trillion won prior to the investment, with Kakao Entertainment investing 50 billion won to secure approximately a 4.72% stake. Based on this, Youngpoong raised the possibility that One Asia and Kakao Entertainment may have coordinated the investment transactions between the two companies in advance.
MBK and Youngpoong claim that a similar structure emerged during the actual investment process. The Gray Fund No. 1, managed by One Asia, invested a total of 100 billion won in Graygo between August and September 2022. MBK and Youngpoong explained that 50 billion won of this amount was used to purchase existing shares, while the remaining 50 billion won was used to acquire new shares.
It is reported that Kakao Entertainment invested the 50 billion won secured from the sale of its existing shares in GrayGo into new shares of Ark Media. MBK and Youngpoong view this transaction structure as evidence linking the One Asia Fund’s investment in GrayGo to Kakao Entertainment’s investment in Ark Media.
MBK and Youngpoong also raised concerns about past investments related to Ark Media made by Yoon Choi, Chairman of KoreaZinc. Chairman Choi acquired 1.2 billion won worth of Story Hunter convertible bonds (CBs) in 2019; MBK and Youngpoong argued that, based on the investment price per share used by Kakao Entertainment for its investment in Ark Media, the value of that stake would amount to approximately 184.2 billion won. However, this is an estimated value calculated based on the investment price at the time and does not represent actual investment returns realized.
MBK and Youngpoong argued that, since funds from KoreaZinc were contributed to a fund managed by One Asia, it is necessary to examine the appropriateness of the investment process and decision-making. In particular, they maintain that it is essential to verify whether there was a potential conflict of interest between Chairman Choi’s personal investment and the One Asia fund’s investment, and whether KoreaZinc’s capital contribution was managed in accordance with proper procedures.
Meanwhile, it is reported that Mr. Ahn Chang-hyun, the former CEO of Ark Media and a director at UNI CHEM.CO.,LTD, has been missing since last July. MBK and Youngpoong argued that Mr. Ahn’s disappearance should also be investigated in connection with this matter.
