Company launches probe into breach-of-trust charges against unregistered officer

[Provided by Seoul IR]
[Provided by Seoul IR]

ArtistCompany, a comprehensive content company, activated its internal control system immediately after allegations of breach of trust surfaced against an unregistered executive.

A company official said Friday that allegations of breach of trust had been raised against an unregistered executive surnamed Lee, adding that the company "will determine the specifics through an audit of the facts and the details of the conduct in question, as well as external legal counsel, and will confirm whether the company has suffered any damage and, if so, its extent."

Depending on the findings of its internal control investigation, ArtistCompany plans to pursue legal action as necessary, including damage claims and recovery procedures against Lee. The company also said it would cooperate fully with any relevant regulatory investigations.

ArtistCompany added that it will implement improvements to its internal controls to prevent a recurrence.

To strengthen its planning and management functions, including finance, the company has brought in outside talent — among them Kim Hyung-seok as chief financial officer, who previously served as a finance executive at Kosdaq-listed companies including Itcen and Insanga.

"The scale of the breach-of-trust allegations has not yet been determined, but we believe the impact on the company's financial soundness and management stability will be minimal or limited," Kim said.

ArtistCompany also prevailed in an appeals court ruling in a damages suit it filed against the former chief executive of a drama production company it acquired in 2024. According to legal sources, the Seoul High Court's Civil Division 16-2, presided over by Judges Kim Seon-hui, Lee Won-seok and Jeong Jae-o, recently upheld a first-instance ruling in favor of the plaintiffs — ArtistCompany and Lee Jung-jae, among others — in their damages suit against Kim Dong-rae, the former head of Raemong Raein, now known as Artist Studio.

ArtistCompany became the largest shareholder of drama production company Raemong Raein through a paid-in capital increase in March 2024, but subsequently clashed with founder Kim over the company's management direction. In June of that year, ArtistCompany filed the damages suit, alleging that Kim had refused to meet investors' demands and was blocking their participation in management.

As of 10:42 a.m. Friday, ArtistCompany shares were trading at 2,990 won, down 930 won, or 23.72 percent, from the previous session.


th5@heraldcorp.com