Lee Jungjae Became Largest Shareholder Through Paid-In Capital Increase in March Last Year
Actor Lee Jungjae, the largest shareholder of the software development company Artist United, has won a damages lawsuit filed against the CEO of a drama production company acquired by Artist United last year.
On the 5th, the 22nd Civil Division of the Seoul Central District Court (Presiding Judge Choi Ukjin) ruled in favor of part of the plaintiffs in a damages lawsuit filed by Artist United, Lee Jungjae, former Easywork Studio CEO Park Inkyu, and another company investor against Kim Dongrae, former CEO of RaemongRaein (now Artist Studio). On the 6th, Yonhap News reported that the court ordered former CEO Kim to pay approximately 2.779 billion won to Artist United, 749 million won each to Lee Jungjae and former CEO Park, and 149 million won to another investor, identified only as Eom.
Lee Jungjae Became Largest Shareholder Through Paid-In Capital Increase in March Last Year
Listed on KOSDAQ in 2021, Artist United is a software development company based on artificial intelligence (AI) and big data platform businesses. In March last year, the company became the largest shareholder of the drama production company RaemongRaein through a paid-in capital increase, but subsequently experienced conflicts over management direction with founder and then-CEO Kim. At the time, Artist United, along with Lee Jungjae and others, participated in a third-party allocation paid-in capital increase worth 29 billion won, securing an 18.44% stake in RaemongRaein, surpassing former CEO Kim’s 13.41% stake. Founded in 2007, RaemongRaein has participated in the production of famous dramas such as "Sungkyunkwan Scandal" (2010) and "Reborn Rich" (2022).
As the management dispute intensified, Artist United filed for court approval to convene an extraordinary general meeting of shareholders in June last year and filed a lawsuit against former CEO Kim.
At the time, Artist United claimed, “After acquiring RaemongRaein, there were discussions about the participation of Artist United’s inside directors Lee Jungjae and Jung Woosung in management activities for the production of films and dramas, but CEO Kim not only refused the investors’ requests but also ignored the request to convene an extraordinary shareholders’ meeting, blocking the investors’ participation in management.” In response, CEO Kim argued, “Contrary to what was discussed prior to the investment, I heard that United was working to acquire a listed entertainment company whose trading was suspended by using RaemongRaein’s funds.”
After the extraordinary shareholders’ meeting concluded in October of the same year, RaemongRaein transferred management rights to Lee Jungjae’s side and changed its company name to "Artist Studio."
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