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'Squid Game' star Lee Jung-jae accused of unfairly trying to take over management rights

By Lee Yoon-seo

Published : June 10, 2024 - 15:06

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Lee Jung-jae speaks at a press conference for Lee Jung-jae speaks at a press conference for "The Acolyte" in Yongsan, central Seoul, Wednesday. (Yonhap)

Actor Lee Jung-jae has been accused of attempting to unfairly seize management rights over RaemongRaein, the Korean drama production company responsible for producing series such as "Maestra" (2023) and "Reborn Rich" (2022).

Kim Dong-rae, the head of RaemongRaein, said via a press release on Monday that Artist United, a company in which Lee stands as the largest stakeholder, has been unjustly pushing RaemongRaein to convene an extraordinary general meeting in a bid to replace its head and overhaul the company's board of directors.

According to Kim, the pressure comes after RaemongRaein objected to Artist United's decision to acquire another company.

Currently, Artist United and related individuals stand as the largest stakeholder of RaemongRaein with 29.33 percent stake, while Lee holds 23.49 percent stake in Artist United.

"RaemongRaein decided to partner with actor Lee Jung-jae's Artist United because we believed that his extensive network and financial influence could facilitate our aspirations for global expansion. Artist United also persuaded us by presenting concrete plans," Kim said in the press release.

"However, contrary to what was discussed before the investment, we learned that Artist United intended to use RaemongRaein's funds to acquire a listed company whose trading has been suspended," he said.

"Therefore, the current management team (of RaemonRaein), including myself, delivered the message (to Artist United) that we could not accept the acquisition of a listed company that does not coincide with RaemongRaein's core business," Kim added.

According to Kim, the response RaemonRaein received in turn was a unilateral notice to hold an extraordinary general meeting to change the head of RaemongRaein and the company name, replace the entire board of directors and amend the articles of incorporation.

"The actions of these investors, which took place less than three months after becoming the largest shareholder, seem to indicate that they intended to use RaemongRaein's cash assets to acquire other companies. It has become clear that the true purpose of their investment was not the initially proposed production of various content or acquisition of intellectual property for RaemongRaein's global expansion," said Kim.

"We cannot allow RaemongRaein, which all employees have worked together to build over the past 18 years for content's advancement, to fall prey to forces seeking to seize management control through deceitful methods," he added.

Kim's announcement came after Artist United on Wednesday filed an application with the court seeking approval to hold an extraordinary general meeting to appoint RaemongRaein's directors.

Artist United additionally initiated legal action against Kim seeking compensation for damages.

According to Lin, the law firm that represents Artist United, Kim purportedly impeded Artist United's involvement in management by disregarding investors' rightful request for an extraordinary general meeting. Lin added that Kim has been disregarding investors' demands to include Lee Jung-jae and fellow actor Jung Woo-sung in managing RaemongRaein.

Meanwhile, shares of RaemongRaein had risen by 15.1 percent on Monday as of noon, selling at 16,830 won ($12) a share.

During management disputes, investors often compete to buy shares, as the outcome can ultimately be influenced by the proportion of shares held by competing parties. Such actions in turn lead to increased buying volume and a rise in the stock price.