Young Poong, MBK Refute Korea Zinc’s Claim of ‘Independent GP Decision’ in One Asia Investments

Choi Yoonbum and One Asia Fund

"Invested in the Same Companies at the Same Time"

Korea Zinc has asserted that the investment in a company funded by the family of Chairman Choi Yoonbum—by way of a fund managed by One Asia Partners, itself backed by Korea Zinc—was an independent decision by the management company (GP), despite suspicions that Chairman Choi’s side pursued private interests. In response, Young Poong and MBK Partners countered that their investments occurred at similar times.

Young Poong and MBK stated on the 28th, "Given that Chairman Choi and his family invested in unlisted entertainment and content companies either at the exact same time or within only several days to months of the One Asia Partners fund investment backed by Korea Zinc, the explanation from Choi’s side that these were 'independent decisions by the general partner' is an unconvincing excuse that fails to clarify the facts."

The two companies, citing related criminal records and disclosures they obtained, said that when Chairman Choi, his investment partnerships, family, and close relatives first acquired shares or convertible bonds (CB) in a particular company, the One Asia Partners fund—backed by Korea Zinc—executed large-scale investments worth tens of billions of won either on the same day or in a short period thereafter.

According to Young Poong and MBK, among the three unlisted entertainment firms in which the Choi family first invested, in the case of Arc Media, Chairman Choi personally acquired the 1st series of convertible bonds worth 1.7 billion won on May 29, 2020. Only 42 days later, on July 10, 2020, the Korea Growth Fund No. 1, operated by One Asia Partners and primarily funded by Korea Zinc, acquired the entire 2nd series of Arc Media’s convertible bonds worth 25 billion won.

They further argued that in July 2021, when another One Asia Partners fund—the Arbitrage Fund No. 1—acquired 1 billion won in Arc Media convertible bonds, Chairman Choi and three of his cousins acquired their own portions of the convertible bonds on the same day or within only 15 days, exhibiting coordinated investment behavior.

The companies stated, "Just before the investment from Korea Growth Fund No. 1, should Chairman Choi’s side have exercised the conversion rights on their convertible bonds, their shareholding would translate to about 45%, making them the largest investor. It is implausible to claim ignorance about large-scale follow-up investments in a company they already backed."

Young Poong and MBK emphasized that similar behavior was repeated at the production company Slingshot Studio. In May 2021, Yeorigo No. 1, the private investment association of Director Choi, acquired 3 billion won in the 3rd series of Slingshot Studio convertible bonds. In October of the same year, the same three cousins of Chairman Choi bought 1.5 billion won in the 5th series of convertible bonds. Three months later, in January 2022, the One Asia Arbitrage Fund No. 1 purchased the 6th series of convertible bonds worth 3 billion won. On June 7, 2023, the Yeorigo No. 1 association (3 billion won) and One Asia Mangosteen Fund No. 1 (5 billion won) acquired the 13th series of Slingshot’s convertible bonds worth a total of 8 billion won on the same day, moving as if in lockstep.

Young Poong and MBK concluded, "For the Choi family to invest in unlisted firms as gatekeepers, followed by a series of investments from funds backed by hundreds of billions of won from a company they effectively control, in intervals of a few days or months—or even on the same day—and then to claim these were independent decisions by the fund manager, is not only an affront to the capital market, but also disregards the intelligence of Korea Zinc’s shareholders."

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