Software company with ties to Lee Jung-jae involved in management rights dispute

Artist United, a software development company of which "Squid Game" star Lee Jung-jae is the largest shareholder, has been accused of trying to unfairly obtain drama production subsidiary Raemongraein's management rights.

Actor Lee Jung-jae attends the 2023 LACMA Art Film Gala held at the Los Angeles County Museum of Art on Nov. 4, 2023. [GUCCI]

Artist United, a software development company that "Squid Game" star Lee Jung-jae is the largest shareholder of, has been accused of trying to unfairly obtain drama production subsidiary Raemongraein's management rights, according to media reports on Monday.

Raemongraein’s CEO Kim Dong-rae expressed his resentment toward Artist United, saying that the company took control of the production company in a “deceptive way.”

Artist United acquired Raemongraein through recapitalization in March. After the acquisition, a dispute over the production company’s management occurred, and Artist United filed a compensation suit against Kim earlier this month, then applied for an extraordinary meeting of shareholders.

“We discussed measures for Artist United’s internal board directors, actors Lee Jung-jae and Jung Woo-sung, to participate in the management of Raemongraein,” Artist United said, according to local media outlets. “However, Kim did not respond to the discussion, and also ignored our request to open an extraordinary general meeting, which led us to file a lawsuit.”

Kim released a statement Monday, claiming that Artist United proceeded differently from what the two parties previously discussed.

“I heard that Artist United is working on taking over a transaction-suspended entertainment company that is listed in the market with Raemongraein’s money,” Kim said in a press release to local reports.

“The board members of Raemongraein, including myself, delivered our stance [to Artist United] that we cannot accept the acquirement of a listed company, which is unrelated to Raemongraein’s main purpose,” Kim said. “However, what we received was a unilateral notice from the company to open an extraordinary shareholders’ meeting regarding issues like changing the chief director and company’s name, resignation and replacement of all board members and modification of the bylaws.”

For Kim, Artist United’s moves could only be seen as using Raemongraein as a disguise to acquire another company using Raemongraein’s capital, as it has only been three months since it became the largest shareholder.

“I will not let Raemongraein be sacrificed to such deception,” Kim added. “So I had no choice as the CEO and the board chairman but to use the board committee to keep Artist United in check, as I could not follow along the act of defrauding management rights, which goes against the interest of shareholders.”

Kim stated that his initial decision to partner with Artist United was because of actor Lee’s network and capital strength, which he hoped would become a base for his company's entry into the global market.

However, Lee never visited Raemongraein, nor did he present any visions regarding its management, according to Kim.

Raemongraein was established in 2007 and participated in the production of TV series such as KBS2’s “Sungkyunkwan Scandal” (2010) and JTBC’s “Reborn Rich” (2022). The company was listed on Kosdaq in 2021.

As of the first quarter of this year, Artist United is Raemongraein’s largest shareholder with 18.44 percent. Lee also has 5.12 percent of Raemongraein’s shares, which make up 23.56 percent of shares when adding Artist United and Lee’s shares.

Kim shares 13.41 percent of the company, while Raemongraein’s board director Yoon Hee-kyung holds 0.51 percent.

Wysiwyg Studios and its CEO Park In-kyu, who hold 10 percent and 5.12 percent of Raemongraein’s shares, respectively, are expected to have important roles in the management rights dispute.

To find out more about Lee Jung-jae, visit Celeb Confirmed!

BY HYEON YE-SEUL [kjdculture@joongang.co.kr]