Bond investors in JoongAng Group affiliates, including JTBC, asked the Financial Supervisory Service for an accounting review. The investors' legal team said on the 26th that it "submitted a request for review to the Financial Supervisory Service (FSS) for the recent financial statements and audit reports of JTBC, JoongAng Holdings, Dabo JoongAng, Contentree JoongAng, and Megabox JoongAng."
The legal team said JTBC issued hybrid capital securities totaling 226 billion won in nine tranches since 2023. Most of the underwriters were affiliates or special-purpose companies whose credit was enhanced by affiliates. They said it needs to be examined whether classifying the 226 billion won in hybrid capital securities as equity in JTBC's accounts was appropriate.
The legal team said the request is to verify through the review "whether the company hid capital impairment by recording book equity funded by money circulated within the group and sold bonds to individuals." JTBC's position is that, regarding the issuance of hybrid capital securities and related matters, it properly disclosed its financial condition under corporate accounting standards and complied with the Financial Investment Services and Capital Markets Act.
Earlier, on the 12th of last month, JTBC failed to repay 20.6 billion won in securitized borrowing fund at maturity and declared a debt default. JoongAng Holdings, Contentree JoongAng, JoongAng P&I, Megabox JoongAng, and JTBC filed for commencement of rehabilitation proceedings. The court accepted JTBC's application for the autonomous restructuring support (ARS) program and put on hold the decision to commence rehabilitation. The other four began rehabilitation proceedings.