[At a Crossroads: Foodnamu③ CEO Kim Young-moon Conceals Personal and Corporate PF Debt]

CEO Kim Young-moon's Real Estate Development Corporation with 100% Ownership
Interest Accumulates from PF Loans...Company Claims 'Ignorance'

Kim Young-moon, CEO of Foodnara.

It has been confirmed that Kim Young-moon, CEO of Foodnamu, the operator of the convenient health food platform ‘Ranking Dakcom,’ did not disclose a corporation in which he holds 100% equity in his business report. This corporation incurs large annual interest expenses due to project financing (PF) loans for real estate development, which could pose a financial risk to CEO Kim’s financial status.

In particular, since CEO Kim is currently taking out loans using his shares in Foodnamu as collateral, the fact that he concealed this company?despite his financial situation being sensitive information for investors?is expected to raise issues regarding trust and transparency.

According to the Financial Supervisory Service’s electronic disclosure on the 23rd, CEO Kim holds 100% equity in a corporation named ‘FND Development.’ The ‘FN’ at the beginning of the corporation’s name is presumed to be an abbreviation of Foodnamu. All Foodnamu subsidiaries’ corporate names start with ‘FN.’ However, unlike other subsidiaries where Foodnamu is the controlling shareholder, FND Development is solely owned by CEO Kim personally.

CEO Kim is the representative director of FND Development. Seong Jun-won, Foodnamu’s Chief Financial Officer (CFO), serves as an inside director, and Kim Young-wan, CEO Kim’s older brother and vice president, is listed as the auditor. CEO Kim and Foodnamu executives thus maintain control over FND Development.

Nevertheless, Foodnamu did not disclose FND Development in its business reports. Although FND Development was established in May 2022, its existence cannot be found in the 2022 and 2023 business reports or the first quarter report of this year.

According to corporate accounting standards, if an individual invests in two companies and holds control or significant influence over both, the two companies are considered related parties. Significant influence refers to participation in the company’s board of directors or involvement in dividend or policy decision processes. Since CEO Kim is the largest shareholder and representative director of both Foodnamu and FND Development, the two companies can be regarded as related parties.

FND Development was established in May 2022 with a capital of 2 billion KRW. The company borrowed 10 billion KRW from Woori Bank and 7.6 billion KRW from CEO Kim, totaling 19.2 billion KRW, to purchase approximately 64,447 square meters of land in Deokyang-gu, Goyang-si, Gyeonggi-do in September 2022. The publicly announced land price as of the end of last year was 7.6 billion KRW.

Last year, the borrowings changed slightly. The amount borrowed from CEO Kim decreased to 3.8 billion KRW, while the loan from Woori Bank increased to 14.5 billion KRW. It is presumed that CEO Kim, who was experiencing financial burdens such as large stock-collateralized loans, recovered some of the loaned funds.

As a result, FND Development’s interest burden increased further. The interest rate from Woori Bank ranges from 5.41% to 5.45%, which is higher than the 4.6% interest on the loan from the representative director. As of the end of last year, FND Development spent about 1 billion KRW solely on interest expenses.

However, it is presumed that the project has not yet progressed. According to FND Development’s audit report, as of the end of last year, land accounted for 19.2 billion KRW out of the company’s total assets of 19.4 billion KRW. If real estate development had proceeded, assets under construction, buildings, or sales revenue should have appeared, but only land is recorded on the books. If the project does not proceed, only large interest expenses will continue to accrue.

Regarding this, a Foodnamu official stated, “Foodnamu has had no transactions with FND Development.” However, they only said they would check why FND Development was not disclosed in the business report and did not provide further answers.