Seoul Western District Court ordered voluntary auction on Oct. 14; four mortgage liens totaling 23.7 billion won registered on property

[EMK Musical Company]
[EMK Musical Company]

A Hannam the Hill apartment in Yongsan-gu, Seoul — purchased for 19 billion won ($14.2 million), a record price for the complex — has been referred to court auction just six months after the sale. The property belongs to singer and musical actor Ok Joo-hyun, 46, who bought it as Ok's first home. Ok's side said the auction proceedings arose as part of debt settlement following a merger and acquisition deal with an investment firm brought in to fund new business ventures.

Ok's agency, Gemstone E&M, said Thursday that it is "currently carrying out specific debt repayment and settlement procedures with the investment firm, and the investment firm plans to repay the full amount of the related loans in accordance with the business plan."

The Seoul Western District Court ordered a voluntary auction on Oct. 14 for the Hannam the Hill property owned by Ok. A voluntary auction is a procedure in which a mortgage holder puts up collateral real estate for court auction to recover a debt. The creditor that filed for the auction is Korea Financial Asset Management Loan, with a claim of about 2.17 billion won. Four mortgage liens are registered on the property, with a combined maximum secured debt of 23.7 billion won.

Ok signed a purchase agreement with SPC Group President Heo Hee-su on May 7 last year and completed the ownership transfer registration on April 10 this year. The purchase price of 19 billion won exceeded by 1.5 billion won the previous complex record of 17.5 billion won, set last year by BTS member Jin. Heo had bought the unit in September 2015 for 6.9 billion won. At the time of Ok's April purchase, the registered maximum secured debt was 12.3 billion won. The maximum secured debt figure represents the ceiling on debt guaranteed by the collateral and differs from the actual outstanding loan balance.

Ok's side said Ok had been preparing new ventures in performance production, event planning and education, building a business plan centered on an existing corporate building in Sinsa-dong, and in that process secured a large-scale investment from a business investment firm. "The Hannam-dong property was purchased in April this year as part of pursuing those business plans and attracting investment," the statement said, adding that a recent merger and acquisition between Ok's company and the investment firm has been concluded, and that procedures are now under way to settle existing matters, including debts related to the property.

Ok's side did not disclose the identity of the investment firm, which company was the subject of the acquisition, or the size and timeline of the repayment. The Hannam the Hill unit is registered in Ok's name as an individual. The statement also did not explain how an investment firm that acquired a company came to be responsible for debts on a personally owned residence. The purchase agreement was signed in May last year, but the timing of the investment has not been made public.

The auction is still in its opening stage. The appraised value, minimum bid price and sale date have not yet been set. If the debt is repaid or the creditor reaches an agreement, the auction application can be withdrawn. Comedian Lee Kyung-sil and broadcaster Jeong Jun-ha previously had their apartments referred to voluntary auction before those proceedings were withdrawn.

Ok's side said it "will continue to carry out the necessary procedures so that the related matters can be resolved smoothly."


shee@heraldcorp.com