Han Sang-woo, CEO of BF Labs, claimed that Lee Sang-hyuk, CEO of Yellow Mobile and the second largest shareholder of BF Labs, is now criticizing the current management, including minority shareholders, after selling the company due to a lack of managerial capability.
On the 18th, CEO Han explained, "When CEO Lee Sang-hyuk transferred management rights in 2021, he was unable to repay debts to investors, which led to requests to prevent forced sales. The contract was made with the condition that once the loan repayment was completed, the largest shareholder status would be transferred back to CEO Lee."
He cited the reasons for the stock being designated as a cautionary investment at the time as related to ▲ the acquisition of Carelabs ▲ the calculation of revenue recognition progress ▲ gaming-related issues such as acquiring shares in MetaChainGames, acquiring shares in WePlayLabs (formerly Haru Entertainment), and acquiring the rights to Taiko M. Among these, he claimed that CEO Lee was involved in the acquisition of Carelabs and gaming company shares.
CEO Han stated, "In the case of the Carelabs sale, a person from CEO Lee Sang-hyuk’s side participated in the board of directors and agreed to the matter," adding, "About 24 billion KRW from the sale proceeds was used to repay debts such as convertible bonds, and investments were made in Dragonfly’s paid-in capital increase and convertible bonds of DSE (now Daesan F&B) at that time."
He continued, "The main reason for the change in the largest shareholder from CEO Lee, i.e., Yellow Mobile, was short-term trading gains," pointing out, "Yellow Mobile acquired short-term trading gains from BF Labs shares on November 24, 2020, and although the Financial Supervisory Service notified the company, the gains should have been recovered but have not been received to date."
He also added, "Yellow Mobile announced a paid-in capital increase but eventually withdrew it, and for three cases, penalty points and fines of 13 points and 36 million KRW respectively were imposed."
Furthermore, he claimed, "At that time, CEO Lee attempted to sell Carelabs due to management crisis and lack of funds, but it failed. He lent Carelabs shares to employees, who then took loans from securities firms using Carelabs shares as collateral and lent the loan amounts back to the company. This transaction was conceived and carried out," adding, "In 2020, following the auditor’s recommendation to resolve this issue, convertible bonds were issued, showing the limits of his managerial capability."
Finally, he emphasized, "The way to normalize the company in the current situation is to sell the company to a third party, not BF Holdings or Yellow Mobile," and stressed, "A business-solid company should become the owner of BF Labs and then work towards resuming trading."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
