MBK: "One Asia, Kakao Prearranged Choi Yoonbeom's 'Jackpot' Investment"... Korea Zinc: "Claims Distort Facts"

Korea Zinc-backed One Asia funds indirectly funneled into Arc Media
"Deal proceeded under pre-agreed terms," critics say

Questions have been raised over whether the allegations surrounding Ark Media’s investment by One Asia Partners, a private equity fund (PEF) manager whose virtually sole investor is Korea Zinc, point to a prearranged scheme to generate enormous returns for Chairman Choi Yoonbeom. Critics also allege that Kakao Group, which needed to shed underperforming affiliates, and the other parties mutually agreed to inflate the company’s valuation.

Young Poong and MBK Partners, which are locked in a management control dispute with Chairman Choi’s side, said on November 2 that they had uncovered circumstances suggesting that One Asia Partners and Kakao had colluded in advance to structure and carry out the Ark Media investment as a single “package deal.”

Young Poong and MBK Partners claimed they had confirmed that a senior figure at One Asia Partners who led the relevant fund had colluded in advance with an investment manager at Kakao Entertainment, about two months before the transaction, on Ark Media’s 1 trillion won valuation, the stake to be acquired and the investment structure. They said they had confirmed remarks exchanged between the two sides, including: “Please check internally whether 50 billion won would be possible through an investment in Ark Media, with 50 billion won in new shares & 50 billion won in existing shares” (One Asia); and “I don’t think there will be any issues, so let’s proceed on that basis for now” (Kakao Entertainment).

Earlier, in 2022, One Asia’s project fund Gray No. 1, to which Korea Zinc had contributed 110 billion won, injected a total of 100 billion won into Kakao Entertainment’s commerce platform subsidiary Greygo, which was in a capital impairment state. The structure involved purchasing Kakao Entertainment’s existing shares for 50 billion won and investing another 50 billion won in a capital increase through the issuance of new shares, making the fund Greygo’s largest shareholder. At the time, Greygo had posted operating losses of about 2.4 billion won in 2020 and about 12.1 billion won in 2021.

Kakao Entertainment reinvested the 50 billion won it recovered from selling its existing Greygo shares into a capital increase at Ark Media, a drama production company in which Chairman Choi Yoonbeom had invested earlier. In the process, Kakao Entertainment valued Ark Media at 1 trillion won, even though it had posted a net loss of 1.6 billion won at the time. As a result, the value of Chairman Choi Yoonbeom’s stake in Ark Media, which he had acquired for about 1.2 billion won, soared to approximately 184.2 billion won.

Young Poong and MBK criticized the deal, saying, “The investment was made at a valuation agreed upon in advance between One Asia and Kakao Entertainment. Although the money passed through a Kakao affiliate, 50 billion won of capital contributed by Korea Zinc was indirectly invested in Ark Media at an inflated valuation, creating a structure in which the value of Chairman Choi Yoonbeom’s stake—acquired earlier—rose roughly 150-fold.”

Ark Media later rode the K-content boom, and news emerged that it could go public at a valuation in the 3 trillion won range. But its listing ultimately fell through as legal risks surrounding Kakao’s bid to acquire SM Entertainment mounted. Ark Media’s revenue also plunged from 141.8 billion won in 2022 to 28.9 billion won in 2025, and the company recorded losses for two consecutive years from 2024.

Meanwhile, Person A, a former CEO of Ark Media and a senior figure said to have detailed knowledge of the entire investment process linking One Asia, Kakao Entertainment and Ark Media, has been missing and out of contact for four months. A missing-person report was filed with the local police station, and a search is reportedly underway.

Young Poong and MBK said, “This matter involves clear allegations of indirect support, using Korea Zinc’s corporate funds to inflate the value of the personal investment assets of Choi Yoonbeom, an inside director, by more than 150 times, as well as serious allegations of occupational breach of trust. An immediate and thorough investigation must be conducted into this illegal transaction structure, which has seriously harmed the interests of the company and all its shareholders.”

Korea Zinc countered that the allegations distorted the facts by suggesting that company funds had been used to benefit a particular individual. A Korea Zinc representative said, “Young Poong and MBK Partners are reaching arbitrary conclusions and making one-sided claims based on selective circumstances and pieced-together information, while completely disregarding the nature and legal relationships of individual transactions and the standard structures of financial investments. Before questioning the investment decisions and governance of other companies, they should first reflect on issues surrounding their own corporate value and the companies they invest in.”

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