'Bodyfriend Acquisition Battle' Han Juhee's Side Claims "KRW 31 Billion Fundraising Was Fulfillment of GP Duty, Not Loan Roll-Over"

"Founder’s In-Company Loan Was Also Intended to Protect Management Control"

The side representing Han Juhee, Chairman of Han & Brothers, argued that the procurement of 31 billion won in shortfall funds during the process of acquiring management rights of Bodyfriend was not a case of using new borrowings to repay existing loans, but rather the fulfillment of duties as the General Partner (GP) to prevent the deal from falling through.

Reference image. Yonhap News Agency

On June 1, the 36th Criminal Division of the Seoul Central District Court (Presiding Judge Lee Junghyup) held a hearing on charges including fraud and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes against Chairman Han, Kang Woongcheol (founder of Bodyfriend), and others. The session included the examination of Kim, CEO of Stonebridge Holdings, as a witness.

During the trial, Chairman Han’s side emphasized the approximately 31 billion won funding gap caused by the withdrawal of anchor investor Saemaul Geumgo. They claimed that, even as co-GP Stonebridge struggled to secure additional funding, Chairman Han personally mobilized his network and assets to take direct responsibility for the shortfall.

Testifying as a witness, CEO Kim stated, "At the time, Chairman Han said, 'Do nothing. I will take care of it myself,' showing strong determination to resolve the funding issue, so I had no choice but to trust him."

On the other hand, prosecutors view this process as a form of using new borrowings to repay existing loans, essentially attempting to acquire the company without any actual capital. Their stance is that Chairman Han deceived founder Kang and misappropriated investment funds despite lacking real investment capacity, hastily assembling the acquisition funds through short-term borrowings obtained in his personal capacity.

The court also saw continued debate over the nature of the '100% drag-along' (mandatory co-sale right) clause. Chairman Han’s side asserted that this clause was arbitrarily proposed to the lender group by Stonebridge to lower the acquisition financing interest rate. In contrast, CEO Kim stated, "From a buyer's perspective, acquiring the entire stake is preferred. This is standard practice in the private equity fund (PEF) industry and a prerequisite for closing a deal."

Chairman Han’s side further argued that the in-company loan of 16.7 billion won taken by founder Kang immediately after the acquisition was a managerial decision. They stated that the loan was a legitimate board resolution intended to prevent Kang’s shares from being pledged to external creditors, which could destabilize management control.

CEO Kim, in response to questions from the defense, also explained, "I believed that stabilizing the shares to prevent them from circulating externally aligned with the goal of protecting management control. The procedure followed a unanimous board resolution and a legal review."

This content was produced with the assistance of AI translation services.