[비즈한국] Jaesan Holdings, an investment company established five years ago by Lee Jae-hwan, former CEO of CJ Powercast (now CJ OliveNetworks) and younger brother of CJ Group Chairman Lee Jay-hyun, has fallen into a state of capital impairment due to cumulative deficits. Amidst over 30 billion won in losses recorded over the past two years due to a string of failed investments, the company is currently continuing its operations using funds borrowed from former CEO Lee Jae-hwan.
Lee Jae-hwan, a member of the Pan-Samsung owner family and younger brother of CJ Group Chairman Lee Jay-hyun, established the investment firm Jaesan Holdings in November 2019 with a capital of 1.5 billion won. At the time of its establishment, the company stated business management consulting as its primary objective. In April of the following year, it transformed into a financial investment firm by adding business objectives such as discretionary investment, investment advisory, corporate M&A, overseas investment facilitation, real estate consulting, and real estate leasing.
After transforming into a financial investment company, Jaesan Holdings increased its capital to 13 billion won through shareholder-allocated paid-in capital increases of 1.5 billion won in May 2020 and 10 billion won in September 2021. On the day of the 10 billion won capital increase, former CEO Lee Jae-hwan also lent 62 billion won to Jaesan Holdings in the form of a loan. This effectively scaled the company into an investment firm managing a total of 75 billion won.
While Jaesan Holdings began full-scale investment activities at the end of 2021, it appears that its investment performance has been on a downward spiral due to successive failures. In 2022, Jaesan Holdings recorded 430 million won in revenue and an operating loss of 1.6 billion won. Examining the investment performance, it is noted that the company recorded a staggering 23 billion won in losses, consisting of 15.5 billion won in equity method investment losses, 4.7 billion won in valuation losses on short-term trading securities, and 850 million won in derivative losses. Last year, the company recorded 260 million won in revenue and a 1.7 billion won operating loss, with losses from investments reaching 10 billion won. In essence, the company recorded over 30 billion won in losses within just two years of launching its full-scale investment activities.
Consequently, Jaesan Holdings has been in a state of capital impairment since 2022. With further losses accumulated last year, total capital is now at the negative 19 billion won level. In this situation, Jaesan Holdings is barely maintaining its business operations with money borrowed from former CEO Lee Jae-hwan. While existing borrowings were around 62 billion won, the company currently owes 58 billion won after partial repayment and extension of the maturity date last month.
As Jaesan Holdings has extended its loan maturity amidst continued losses, attention is focused on the company's future investment activities. Regarding this, a CJ Group official stated, "As it is a private investment company owned by a member of the owner family, we have no separate knowledge of the matter."
Meanwhile, former CEO Lee Jae-hwan previously formed the Jeil Bio Fund (Ascent Bio Fund) in 2020 together with Ra Deok-yeon, a key suspect in last year's highly controversial SG Securities stock price collapse. The Ascent Bio Fund became the largest shareholder of Cytogen217330, a bio-diagnostic platform company that entered the KOSDAQ market on November 22, 2018, and engaged in a management dispute. Furthermore, it was confirmed that in December of last year, the Ascent Bio Fund sold its stake in Cytogen to CandyX.