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Suspicious Transactions Discovered in Preedlife’s Acquisition of Nonsan Funeral Home

[비즈한국] Suspicious circumstances have been uncovered by Bizhankook regarding the acquisition of the Shilnakwon Nonsan Funeral Home by Preedlife, the nation's No. 1 mutual aid company. A newly established corporation signed a sales contract with Preedlife on the very same day it purchased the funeral home, at a price approximately 2.3 billion KRW higher than the previous transaction. Preedlife stated, "We included a confidentiality clause in the real estate sales contract, and we are unsure how this information became public," which is only fueling further suspicion.

Preedlife, which holds the largest number of funeral homes in the country, operates 14 direct-managed branches nationwide under its premium funeral home brand "Shilnakwon," including locations in Gimpo, Incheon, Gyeonggi (Yongin), Sejong, Osan-Dongtan, Hongcheon, Namdaejeon, Galma-Seongsim, Dangjin, Ilsan, Paju-Unjeong, Nonsan, Pohang, and Busan. The Shilnakwon Nonsan Funeral Home is the twelfth branch, which opened in January of this year after Preedlife purchased and renovated the local funeral home last December. The site area covers 7,063㎡ (2,137 pyeong), and the building, spanning from one basement level to three stories above ground, has a total floor area of 3,207.22㎡ (970 pyeong).

However, suspicious circumstances were detected in this transaction. The Nonsan Funeral Home had been operated by an individual for over 20 years before "ESA Co., Ltd." purchased it for 6.15 billion KRW on December 11, 2023. On that same day, ESA signed a contract to sell it to Preedlife for 8.44 billion KRW. This newly established corporation, founded just one month prior to the deal on November 15, 2023, managed to pocket a profit of 2.29 billion KRW overnight. Preedlife completed the final payment and took ownership of the Nonsan Funeral Home on December 29, 2023, just 18 days after the sales contract. Real estate industry experts are baffled by the property value increasing by nearly 2.3 billion KRW in a single day. An industry official who requested anonymity also pointed out, "Logically, this makes absolutely no sense."

In response to Bizhankook’s inquiries, Preedlife claimed it was a normal real estate transaction with no legal issues. A Preedlife representative stated, "When signing the real estate contract with ESA, we added a confidentiality clause prohibiting the disclosure of related matters to third parties. If this information was leaked, we will hold ESA legally responsible." The representative added, "There is no legal problem as we underwent various verifications, including appraisals, revenue structure analysis, and legal reviews of the sales contract." They also stated, "Preedlife and ESA are not related parties."

When asked about the criticism that there was insufficient time to conduct proper verification since the sale contract with Preedlife was signed immediately after ESA purchased the property, the company dismissed the concern, stating, "There is nothing wrong with it."

However, reactions from the real estate and mutual aid industries remain negative. The aforementioned mutual aid industry official analyzed, "It appears highly likely that Preedlife either engaged in a double contract through a newly established entity like ESA or colluded with ESA on a 'down contract' (reporting a lower price to tax authorities)." Regarding these allegations, Preedlife only responded, "Please understand that we cannot provide any further position as this is a matter of confidentiality."

Meanwhile, Preedlife is a mutual aid company acquired by the private equity firm (PEF) VIG Partners in April 2020 for 300 billion KRW from the family of founder Park Hun-jun. Last July, after selling a portion of its stake to the global private equity firm KKR, Preedlife was valued at over 1 trillion KRW.