[At the Crossroads] Xecure ① Was the Capital Increase Disclosure False?... Private Lending with Shareholder Funds

Claimed Use for Operating Funds, But Engaged in High-Interest Private Lending
Received CB Investment from "M&A Financier" Won Youngsik

KOSDAQ-listed company Xecure has been found to be engaging in high-interest lending using funds raised from its shareholders. Controversy is expected, as the company used the money for relatively high-risk private lending, contrary to the stated purposes disclosed at the time of fundraising.

According to the Financial Supervisory Service's electronic disclosure system on November 28, Xecure announced on November 24 that it would lend 12 billion won to a corporation called FNB Mobility. This amount accounts for 38% of Xecure's equity capital. The interest rate is 13% per annum, and the loan period is until December 2, 2025.

FNB Mobility is a corporation with total equity of only 600 million won. Of its 11.6 billion won in assets, 11 billion won is made up of liabilities. As of last year, it recorded 2.1 billion won in sales and 30 million won in net profit. Despite these figures, Xecure lent 12 billion won to this company. This is interpreted as the reason for the high interest rate compared to market rates. Real estate in Jeju Island and other assets were provided as collateral.

Earlier, on November 13, Xecure also lent 6.3 billion won to a corporation called Daejong Sam. The annual interest rate is 20%, and the loan is for about six months, until May 12, 2026. Daejong Sam is also a company with 900 million won in capital and zero sales. Real estate located in Jung-gu, Seoul, was provided as collateral.

Xecure was able to lend out as much as 18.3 billion won because it recently raised funds through a rights offering to existing shareholders and the issuance of convertible bonds (CB). As of the end of last year, Xecure's cash and cash equivalents amounted to only 8 billion won. The company posted an operating loss of 2.1 billion won and a total comprehensive loss of 16.4 billion won, making it difficult to secure cash from business operations.

In January, Xecure issued CBs worth 15 billion won. The recipients were investment associations whose largest shareholder is Ocean W, a KOSDAQ-listed company. Ocean W is wholly owned by Won Sungjun, the son of Won Youngsik, former chairman of Chorokbaem Group.

Won Youngsik is known for having initially engaged in high-interest lending and for playing the role of a major financier in the listed company M&A market for over 20 years. In 2017, he was implicated in the Homecast stock price manipulation case, receiving a two-year prison sentence in the first trial but being acquitted on appeal. In 2023, he was indicted and detained for allegedly participating in stock price manipulation led by Kang Jonghyun, known as the "real owner of Bithumb." He has since been released on bail.

Additionally, in August, Xecure carried out a rights offering to existing shareholders worth 10.9 billion won. This type of rights offering asks existing shareholders for additional investment. At that time, the subscription rate reached 99.32%, indicating that most Xecure shareholders invested in confidence in the company’s future growth.

The issue is that Xecure did not adhere to the stated plans for the use of funds disclosed at the time of the rights offering. In the securities registration statement, Xecure said it would use the raised funds for business operations, such as manufacturing mobile phone USIMs, which is its main business. The company also stated that until the funds were actually needed for operations, they would be managed safely through short-term financial products at qualified financial institutions.

When raising funds through CBs, the company also disclosed that the purpose was to acquire other companies. However, none of these plans were carried out as disclosed, and most of the funds raised were instead used for high-risk private lending.

Xecure did not respond to inquiries regarding this matter.