JoongAng Ilbo and JTBC headquarters. Photo courtesy of JoongAng Group
Bond investors in JoongAng Group affiliates, including JTBC and JoongAng Holdings, have asked the Financial Supervisory Service (FSS) to conduct an accounting review of the financial statements and audit reports of five affiliates.
The legal team representing the bond investors in JoongAng Group affiliates pointed out on the 26th that most of the 226 billion won in hybrid securities issued by JTBC since 2023 were acquired by JoongAng Group affiliates or by special purpose companies (SPCs) whose credit was reinforced by the affiliates. “Of the 54 billion won in JTBC hybrid securities acquired by Dabo JoongAng in 2024, 40 billion won was money borrowed from JoongAng Holdings on the day of payment,” the legal team said. “This, in turn, was funded by personal loans from JoongAng Group Vice Chairman Hong Jung-do and JoongAng Holdings Chairman Hong Seok-hyun, along with money raised by Contentree JoongAng through the issuance of electronic short-term bonds.”
“The controlling family’s personal funds and short-term borrowings from affiliates effectively became JTBC’s capital by passing through the holding company,” the legal team said, explaining the purpose of the review request. “Please verify through a review whether they concealed a state of capital impairment through ‘book capital’ recorded with funds circulated internally within the group, and sold bonds to individuals.”