[Public Companies at a Crossroads] Fantagio① CEO Park Haeseon’s Demand for Management Rights Protection Lowers Sale Price

[Asia Economy Reporter Jang Hyowon] It has been confirmed that Park Haeseon, CEO of Fantagio, demanded unreasonable management agreements from bidders in order to retain control during the sale process of the entertainment management company Fantagio.

As a result, about three bidders who offered around 18 to 20 billion KRW withdrew from acquiring Fantagio, and eventually GNC Partners acquired Fantagio for 15 billion KRW.

According to the Financial Supervisory Service's electronic disclosure on the 7th, Gold Finance Korea, the largest shareholder of Fantagio, signed a contract on the 14th of last month to transfer 31.33% of shares to GNC Partners at 660 KRW per share, totaling 15 billion KRW. A deposit of 3 billion KRW has been paid, and the remaining 12 billion KRW must be paid by the 27th for the stock transfer to be completed.

According to the investment banking (IB) industry, the sale of Fantagio shares has been underway since early this year. This is because the chairman of the Chinese JC Group, the largest shareholder, was arrested on charges including fraud, and the company is effectively undergoing liquidation procedures. Previously, about three bidders reportedly offered acquisition prices between 18 and 20 billion KRW.

However, all of them withdrew from the acquisition midway. It is known that they could not agree to the 'management agreement' sent by CEO Park Haeseon to the bidders.

The agreement proposed by CEO Park included clauses favorable to him, such as guaranteeing management rights, prohibiting involvement in the entertainment business, and overseas entertainment business investments. It also stipulated a penalty of 2 billion KRW if violated.

The reason CEO Park could make such demands is that he currently controls Fantagio's management rights. As of the end of last year, Fantagio's registered executives were three people: CEO Park, Si Yangyang, and Jung Dongcheon. Among them, Director Jung is known to be a person loyal to CEO Park. This means CEO Park secured two-thirds of the board of directors.

After the sale failed, GNC Partners was selected as the acquirer at a price lower than the initial bid. GNC Partners is a company related to listed companies such as SFC and Croba Hightech, which are currently facing trading suspension and delisting risks.

However, it is uncertain whether GNC Partners can fully exercise management rights. According to related industries, GNC Partners also did not agree to CEO Park's management agreement.

In fact, the 20 billion KRW capital increase conducted after the contract with GNC Partners is unrelated to GNC Partners. The capital increase targets, Istar Global and Y&Company, are known to have been directly attracted by CEO Park.

An investment industry official pointed out, "If the largest shareholder does not secure management rights, it becomes a half-hearted deal. Even if the remaining payment is made by the payment deadline to secure shares, it will only be a financial investment, so the possibility of resale cannot be excluded."

Meanwhile, Fantagio is a comprehensive entertainment company managing actors, singers, and producing albums. Artists such as Ong Seongwu of Wanna One, Astro, and Weki Meki are signed under the company.