As a fund financed by Korea Zinc that invested in the unlisted entertainment company Arc Media faces the risk of losses, Young Poong and MBK Partners claimed that "it has been confirmed that most of the investment in convertible bonds (CB) previously made by Korea Zinc inside director Choi Yoon-beom and his relatives was recovered."
Young Poong and MBK Partners said on the 3rd that, after analyzing Arc Media's registry and records related to convertible bonds, they found that the inside director Choi and his relatives, through private investment associations, invested a total of 5.2 billion won in Arc Media CBs from 2019 to 2021 and have recovered most of the investment from 2025 to recently.
By contrast, the outlook for recovery by two funds of One Asia Partners backed by Korea Zinc is unclear. Kakao Entertainment also invested 50 billion won in Arc Media but recognized a loss of 45.5 billion won at the end of last year, judging that the value of the investment assets had fallen sharply. At the time, Kakao Entertainment was said to have valued Arc Media at about 1 trillion won.
It was also noted that the timing of the investment recovery by the inside director Choi and others overlapped with when Arc Media's results began to deteriorate in earnest. From 2024, Arc Media reportedly recorded an operating loss as its expense structure continued to exceed sales. Young Poong and MBK Partners believe that the inside director Choi and his relatives began to recover their investment from 2025 and, as a result, recovered a significant amount of their investment with little loss.
In contrast, the recovery prospects for the funds financed by Korea Zinc that invested later are uncertain. Kakao Entertainment also invested 50 billion won in Arc Media, but at the end of last year recognized a loss of 45.5 billion won, judging that the value of the investment assets had fallen sharply. At the time, Kakao Entertainment was said to have assessed Arc Media's corporate value at about 1 trillion won.
Young Poong and MBK Partners are taking issue with the divergence between the recovery of funds by the inside director Choi's family and the potential losses at the funds financed by Korea Zinc.
Young Poong and MBK Partners said, "While Korea Zinc's investment is at risk of loss, only the Choi family exited first without losses, which is difficult for Korea Zinc shareholders to accept," adding, "It is necessary to confirm the circumstances under which the funds invested by the controlling shareholders' family were recovered while the company and shareholders are facing the risk of losses in the tens of billions of won."
Korea Zinc maintains that the investment was normal. On the 28th of last month, Korea Zinc said, "We have explained the facts several times regarding the funds managed by One Asia Partners," adding, "As a limited partner (LP) of the funds, we invested capital, and the selection of individual investment targets and investment decision-making were executed independently by the fund manager (GP)."
However, Young Poong and MBK Partners said it does not add up that the inside director Choi, who served as CEO of Korea Zinc at the time of the investment, personally recovered most of the funds invested in Arc Media CBs.
Young Poong and MBK Partners emphasized, "It is necessary to confirm the circumstances under which the Choi family recovered their investment while the funds financed by Korea Zinc were put at risk of loss, and to review the entire investment and recovery process," adding, "A review by the relevant authorities and the audit committee of Korea Zinc is needed."