High-Interest Loan Controversy Burdens Franchisees... Myeongryunjinsagalbi Chairman and Spouse Revealed as Actual Owners of 12 Lending Companies

Using Korea Development Bank Policy Funds for Lending Business
Park Sanghyuk: "Thorough Investigation by Authorities Needed"

Lee Jonggeun, Chairman of Myeongryundang, the company operating the unlimited refill pork ribs franchise "Myeongryunjinsagalbi," has been identified as the actual owner of 12 lending companies. These lending companies have been at the center of controversy after it was revealed that they borrowed funds from Myeongryundang and provided high-interest loans to franchise owners who lacked startup capital.

Exterior view of Myeongryun Jinsa Galbi restaurant.

According to data obtained from the Songpa District Office by the office of Assemblyman Park Sanghyuk of the Democratic Party of Korea on September 24, all 12 companies, including B.I. Angel Networks Lending, are owned by Chairman Lee and his spouse, Yoo Jinsook. Chairman Lee holds a 100% stake in six companies, a 90% stake in three, and a 50% stake in one. Ms. Yoo independently or predominantly owns two companies as well. She is also a major shareholder in Myeongryundang, holding an 11% stake. The combined stake of the couple and their related parties in Myeongryundang amounts to 65%.

Since these lending companies are classified as related parties of Myeongryundang, suspicions about Chairman Lee's involvement have persisted. However, this is the first time that the specific ownership structure has been disclosed.

These lending companies borrowed funds from Myeongryundang and provided franchise owners with loans at mid-10% annual interest rates. Myeongryundang lent a total of 88.2 billion won to the lending companies, an amount exceeding its net assets of 83.7 billion won. The company covered its own shortage of operating funds by securing low-interest policy loans from the Korea Development Bank at annual rates of 3-4%. The profit generated from borrowing at low interest and lending at high interest effectively flowed into the lending companies owned by Chairman Lee.

Assemblyman Park Sanghyuk stated, "It has been confirmed that Chairman Lee provided high-interest loans to franchise owners through 12 lending companies," and emphasized, "Authorities must thoroughly investigate suspicions of splitting lending company registrations and unregistered lending activities."