This article was displayed on the ChosunBiz MoneyMove (MM) site at 8:43 a.m. on Apr. 21, 2026.
In the course of the management control dispute surrounding the private equity fund manager Seoul Equity Partners (Seoul PE), it has been confirmed that the current management has been suspended from duty. The court sided with the largest shareholder, yet forecasts say the conflict between the two sides will continue. The recent failed investments in WINIA and INITECH could also emerge as triggers.
On the 21st, according to investment banking (IB) and according to legal sources, the Seoul Central District Court recently ruled in favor of the plaintiff in the first trial filed by Dongsuh ESG to cancel Seoul PE's 2025 management appointments. Accordingly, the Seoul High Court also granted an injunction to suspend the effect of Seoul PE's shareholders' meeting resolution, and the execution of duties by the current management, including CEO Han Jae-hyeok, was suspended.
The dispute surrounding Seoul PE began on Dec. 2024 during the acquisition process. Dongsuh ESG and Chair Na Hyeon-sang had entered into a contract to purchase equity from individual shareholders who at the time held 100% of Seoul PE's shares. The plan was for Dongsuh ESG to acquire 51% equity in Seoul PE and for Chair Na to acquire the remaining 49% to embark on joint management.
They initially reached a management agreement to appoint two inside directors designated by Dongsuh ESG and one designated by Chair Na. The auditor was to be a person designated by Chair Na, pledging smooth management. In fact, at the shareholders' meeting held immediately afterward, CEO Choi and Director Lee, recommended by Dongsuh ESG, were appointed to Seoul PE's management, and Director Kwon, recommended by Chair Na, was also appointed. Chair Na personally took the auditor role.
However, in Jan. 2025, the following month, Chair Na's side unilaterally convened a shareholders' meeting, dismissed the management appointed by agreement, and put forward a new management team. The minutes at the time stated that Chair Na attended as a sole shareholder and held an extraordinary shareholders' meeting, and the shareholder registry listed Chair Na as a single shareholder holding 100% equity.
The collateral agreement made during their acquisition of Seoul PE provided the pretext for this situation. To raise funds for the acquisition of Seoul PE, Dongsuh ESG borrowed funds and pledged the acquired equity as collateral, and it was agreed that the collateralized equity would later be transferred to Chair Na. Seoul PE and Chair Na's side argued that Chair Na acquired the shares provided as collateral and secured 100% equity.
However, the court did not accept Chair Na's argument. It found that, due to significant defects in the process of convening the shareholders' meeting, the appointment of new management in breach of the management agreement was void. Because the shareholder registry, which serves as the basis for the shareholders' meeting at the time, had not been updated, Dongsuh ESG's 51% voting rights had to be guaranteed.
The court said, "Dongsuh ESG, as a 51% equity shareholder listed in Seoul PE's shareholder registry at the time of the shareholders' meeting, was in a position to exercise voting rights," and added, "Because the board's notice procedures for convening the shareholders' meeting were not carried out at all, the resolution of the shareholders' meeting at that time is unlawful," explaining the grounds for the ruling.
With the court siding with Dongsuh ESG in the management control dispute surrounding Seoul PE, the current management of Seoul PE has also been suspended from duty. In the injunction lawsuit to suspend the effect of the shareholders' meeting held last year, the court had sided with Seoul PE, but with this ruling, the second-instance injunction result was overturned.
This ruling is expected to affect the ongoing lawsuit over management control of Songhyun Investment, a subsidiary of Seoul PE. Like Seoul PE, Songhyun Investment also unilaterally appointed management; Seoul PE won in the first instance, but the second-instance trial is underway due to an appeal.
As Seoul PE's management control dispute drags on, market attention to investment failures during this period is also growing. Early last year, under the current management, Seoul PE sought to acquire WINIA, which was undergoing rehabilitation proceedings, but failed to close the deal and ultimately walked away. Around the same time, it also pursued the acquisition of INITECH in a consortium with Roi Investment Partners and Simon J & Company, but the effort fell through due to internal disagreements.
An industry official said, "With the management of Seoul PE, which has been mired in a management control dispute and a string of failed investments, now suspended from duty, normal operations are unlikely for the time being," and added, "Some quarters are raising suspicions that the current management has multiple records of fraud, and it is being closely watched how far the fallout will spread."