Laemon Lane Management Dispute, Lee Jung-jae's 'Landslide Victory'

Lee Jung-jae and Jung Woo-sung Appointed as Inside Directors
Agenda for Reappointment of CEO Kim Dong-rae Not Submitted

Actor Lee Jung-jae achieved a decisive victory in the management rights dispute by being appointed as an inside director at the Lamong Lane extraordinary general meeting of shareholders.

On the 31st, Lamong Lane held an extraordinary general meeting of shareholders at the Balance Building in Nonhyeon-dong, Gangnam-gu, Seoul, where they resolved agenda items including amendments to the articles of incorporation and director appointments. A total of 535 shareholders, including proxies, attended the meeting, representing 7,141,301 shares, which is 71.4% of all shares.

At the shareholders' meeting, all agenda items proposed by Artist United, including amendments to the articles of incorporation and director appointments, were approved. The number of shares in favor was about 6.5 million. Lee Jung-jae and Jung Woo-sung were both appointed as inside directors. The agenda to appoint Kim Dong-rae, the current CEO of Lamong Lane, and director Kim Ki-yeol was not submitted.

Earlier, Artist United, with Lee Jung-jae as the largest shareholder, invested 29 billion KRW in Lamong Lane's third-party allotment paid-in capital increase in March, acquiring 2.92 million shares and becoming the largest shareholder. As of the end of the first half of this year, Artist United holds 18.44% of the shares, and Lee Jung-jae himself holds 5.12%. CEO Kim Dong-rae and others hold 13.92% of the shares.

After becoming the largest shareholder of Lamong Lane, Artist United entered the bidding for the acquisition of the production company Chorokbaem Media in April. In response, CEO Kim opposed, sparking the management rights dispute.

CEO Kim claimed that he accepted the paid-in capital increase because Artist United verbally promised to acquire a major domestic entertainment agency and attract foreign investment. On the other hand, Artist United countered that CEO Kim changed his mind after the contract and refused to transfer management rights, despite having sold the company for personal reasons.

In response, 11 minority shareholders, including Mr. Shin, filed an injunction to suspend the issuance of new shares related to the paid-in capital increase conducted by Artist United, but all were dismissed on the 19th. They have appealed, and the case is currently ongoing.

Additionally, Artist United filed an injunction to prohibit and allow the exercise of voting rights against CEO Kim Dong-rae, which the court accepted. This means CEO Kim Dong-rae must vote in favor of Artist United’s agenda to appoint inside directors. If violated, he must pay 5 billion KRW each to Artist United.