[At a Crossroads for Listed Companies] NK Mulsan and Mirae I&G Invest 17 Billion Won... Subsidiaries Remain 'Out of Sight'

[Asia Economy Reporter Yoo Hyun-seok] Artist Cosmetic, which received over 17 billion KRW in support from NK Mulsan and Mirae I&G, has yet to establish a clear direction for its new business even after more than two months. Meanwhile, NK Mulsan, the largest shareholder of the parent company, is currently conducting a large-scale paid-in capital increase exceeding 20 billion KRW.

According to the Financial Supervisory Service's electronic disclosure system on the 22nd, Artist Cosmetic conducted a third-party paid-in capital increase totaling 17.1 billion KRW last August, targeting its parent companies Mirae I&G and NK Mulsan. Mirae I&G and NK Mulsan paid 8.1 billion KRW and 9 billion KRW respectively, securing 49.72% of shares each. NK Mulsan is the largest shareholder of Mirae I&G.

Artist Cosmetic was established in October 2016. At that time, Mirae I&G invested 90% of the shares, and the company is unlisted. Its main business is wholesale and retail of cosmetics. Although established in 2016, its sales have been minimal. In 2017, it recorded sales of 270 million KRW with a net loss of 326 million KRW, and in 2018 and 2019, sales were zero. Net losses of 11.35 million KRW and 2.16 million KRW were recorded respectively.

Despite receiving a large-scale fund of 17.1 billion KRW, Artist Cosmetic has not yet formulated a clear business plan even after more than two months. Although it was said at the time that the funds would be used for new businesses, there has been no news since.

A Mirae I&G official stated, "We have not heard anything yet," and explained, "The management decided to proceed with the paid-in capital increase, but it seems the new business will not start immediately."

NK Mulsan gave a similar response. A company representative said, "There is no other information from the management yet," and added, "We do not know anything about the new business."

Meanwhile, NK Mulsan, which invested 9 billion KRW, is recently conducting a paid-in capital increase worth 23.9 billion KRW through a rights offering followed by a general public subscription of forfeited shares. After providing large-scale funds to its affiliates, it is raising over 20 billion KRW again through the market.

Of the funds raised, NK Mulsan will use 9.2 billion KRW to establish a cultural industry specialized company for drama production. The produced drama is scheduled to air in May next year. Additionally, 14.7 billion KRW will be invested in the Maintenance, Repair, and Operations (MRO) related business. 10.5 billion KRW will be used to cover operating deficits arising from providing MRO services. The remaining 4.2 billion KRW will be allocated to operating funds for MRO sales offices.