Yoonbeom Choi, Chairman of Korea Zinc. (photo= Korea Zinc)

 

[Alpha Biz=(Chicago) Reporter Kim Jisun] Korea Zinc lost 10 billion won in investment after investing in SM Entertainment and other companies through private equity funds (PEF).

"Korea Zinc invested 101.6 billion won in Havana 1 in February last year, but suddenly liquidated Havana 1 at the end of last year," Youngpoong said in a press release. In the process, Youngpoong claimed that Korea Zinc received a refund of 52 billion won at the time of liquidation, while the rest received 440,640 shares (acquisition of 40.1 billion won), or 2% of SM Entertainment's shares, in kind.

The current market value of SM Entertainment shares received by Korea Zinc is about 33.1 billion won, which is a loss of 7 billion won compared to the initial stock acquisition. Youngpoong added, "Considering the 9.5 billion won investment loss (handling impairment losses) incurred in the process of liquidation of Havana No. 1, the total loss amounts to 16.5 billion won."

Youngpoong pointed out that Korea Zinc's investment losses do not stop here.

The exact reason why Korea Zinc invested in SM Entertainment, which is not related to its main business, through PEF is not known.

An industry official said, "Korea Zinc is estimated to have lost billions to tens of billions of won by investing hundreds of billions of won in PEFs that are unrelated to its business."

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