Lee Jung-jae Accused of Fraud Amidst Raemongraein Dispute; Artist United Counters with Legal Action
Aug 10, 2024
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On the 10th, it was reported that Kim Dong-rae, CEO of Raemongraein, filed a complaint with the Gangnam Police Station in Seoul against Lee Jung-jae and Park In-kyu, the former CEO of WYSIWYG Studios, for violating the Act on the Aggravated Punishment of Specific Economic Crimes (Fraud). Kim alleges that Lee and Park acquired the largest shareholder's stake under false pretenses, deceiving him over a long period despite lacking the intention or capability to grow Raemongraein into a global drama production company or to manage the company alongside him.
In response, Artist United's legal representative filed a counter-complaint against Kim Dong-rae, accusing him of fraud and making false accusations. The statement emphasized that "Investors are extremely dismayed by the baseless claims made by Kim Dong-rae, who has failed to meet his contractual obligations despite the investors fulfilling theirs." The statement continued, "There is no legal basis for fraud on the part of the investors, who have met all obligations under the investment contract. Kim Dong-rae's allegations are entirely unfounded and are merely one-sided claims."
Artist United further stated that Kim Dong-rae has already been accused of violating the Act on the Aggravated Punishment of Specific Economic Crimes (Fraud) due to his improper complaint. The company urged Kim to cease actions that harm the interests of Raemongraein and its shareholders and to fulfill his contractual duties promptly.
Raemongraein, established in 2007, is known for producing popular dramas such as "Sungkyunkwan Scandal" and "Reborn Rich." The company was listed on the KOSDAQ market in 2021. In March 2024, Artist United acquired Raemongraein through a paid-in capital increase. However, a management dispute arose, leading Artist United to seek court approval in June for an extraordinary shareholders' meeting. Subsequently, some Raemongraein shareholders filed an injunction to suspend the validity of new shares acquired by Lee Jung-jae.
Below is Artist United's Official Statement
We, the legal representatives of Artist United, assert that investors legally acquired management rights in Raemongraein through a common stock investment contract signed on March 14, 2024. Despite fulfilling all contractual obligations, including payment for new shares, CEO Kim Dong-rae failed to transfer management rights as agreed. Repeated requests for compliance were ignored, prompting us to seek legal recourse in June. Kim's recent complaint against our investors is baseless and misleading, and we intend to prove this with objective evidence during the ongoing police investigation.
We urge Kim Dong-rae to cease actions that damage Raemongraein and its shareholders and to honor his contractual obligations immediately. Our investors remain committed to resolving the current management dispute and restoring normal operations for the benefit of all shareholders.
olzllovely@sportschosun.com
