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Election Commission IT Contractor 'B2En' Draws Attention for Recruiting Numerous Political and Government Figures

[비즈한국] B2En307870 has recently recruited individuals with deep ties to the political sphere as board members, drawing significant attention to the reasons behind these appointments. B2En is a subsidiary of the Ssangbangwool Group and has previously handled service contracts for the National Election Commission (NEC). Some in political circles have been linking B2En to allegations of election fraud.

What kind of company is B2En?

B2En is a data-related company established in 2004. Its primary businesses include data solutions and data consulting, and it has recently entered the artificial intelligence (AI) sector. Ssangbangwool Group acquired B2En last year through the 'Ex-Twins No. 1 Fund'. Investors in the Ex-Twins No. 1 Fund include Ssangbangwool Group subsidiaries such as Dimoa, Kwanglim014200, and IOK Company. B2En’s current headquarters is also located in the Ssangbangwool Group building in Yongsan-gu, Seoul.

B2En has not shown particularly strong financial performance. According to its business report, the company recorded 32 billion won in revenue and an operating loss of 2.5 billion won in 2023. B2En continued its deficit trend in the first three quarters of 2024, with 18.3 billion won in revenue and an operating loss of 3.6 billion won.

B2En came into the spotlight following the emergency martial law incident. As some raised suspicions of election fraud, questions emerged due to the fact that B2En had previously performed server management services for the NEC. Lee Soo-jung, a professor at Kyonggi University, posted on social media last December, stating, "Even if impeachment occurs, it seems the NEC must be thoroughly investigated," and added, "Kim Sung-tae, the former chairman and owner of Ssangbangwool, colluded with Democratic Party leader Lee Jae-myung to win business rights in North Korea, and he is currently on trial with Representative Lee on charges of sending bribe-like funds to North Korea to facilitate Representative Lee's visit to Pyongyang." This post has since been deleted.

Professor Lee Soo-jung's claims did not gain much traction. Representative Lee Jun-seok of the Reform Party criticized the professor's claims on social media, stating, "Let's push people like this out of politics quickly," and added, "If conservatives don't clean up people like this, they won't be able to win any future elections."

The NEC responded on January 21, stating, "B2En was the service provider for the integrated operation of the election information system from 2019 to 2023, and its primary duties were the maintenance and repair of various election-related application programs, which is unrelated to hardware manufacturing." The NEC further refuted the claims by saying, "We select contractors through an open bidding process in compliance with relevant laws, and we are not privy to the ownership stakes or corporate governance structures of companies during the bidding process."

B2En is also denying these allegations. They explain that because the Ssangbangwool Group acquired B2En last July, it has no connection to the general election held last April. Financial Supervisory Service public filings show that the Ex-Twins No. 1 Fund became B2En's largest shareholder in May of last year, which is also after the general election.

In December, B2En emphasized, "The 'theory regarding a link between B2En and NEC server hacking' being circulated online is a clear falsehood, and it appears there is an intention to make our company a political scapegoat," adding, "We will take strong legal action, including civil and criminal liability, against all acts of expanding and reproducing these false claims."

Emergence of Figures with Political Ties

In the midst of this, a new shareholder has appeared at B2En. Mars LP No. 1 secured a 10.84% stake in B2En through a paid-in capital increase on January 7. They have also announced further capital increases; Mars LP No. 1 plans to inject 5.5 billion won into B2En in the form of a paid-in capital increase on February 28. The new shares issued through this increase will be listed on March 21. Once the process is complete, Mars LP No. 1's stake in B2En will rise to 20.90%.

Kim Ki-hoon, CEO of New Oriental Hotel, contributed 51% of the funding for Mars LP No. 1. CEO Kim previously worked as the CEO of Eleven Management Korea, a professional football player agency. Famous football players such as Lee Dong-gook and Cho Won-hee were once represented by Eleven Management Korea.

Even after the paid-in capital increase by Mars LP No. 1, the largest shareholder of B2En remains the Ssangbangwool Group. Besides the Ex-Twins No. 1 Fund, other Ssangbangwool Group subsidiaries such as J.Jun Cosmetic025620 and Vivien002070 also hold stakes in B2En. The total stake held by Ssangbangwool Group subsidiaries is currently 30.25%. After the capital increase by Mars LP No. 1, Ssangbangwool Group's stake will be diluted to 26.84%, though they will still hold a larger stake than Mars LP No. 1.

Significant changes have occurred in B2En's board of directors following the emergence of Mars LP No. 1. As CEO Kim Ki-hoon has directly taken office as the CEO of B2En, it appears Mars LP No. 1 is exerting considerable influence. Previously, B2En was under a co-CEO system with Yoo Ho-jeong and Lee Chang-hyun. Yoo Ho-jeong resigned on January 23, and Kim Ki-hoon took office as the new CEO. B2En recently held an extraordinary general meeting of shareholders and recruited a large number of new directors. Specifically, it was decided to newly appoint four executive directors, three outside directors, and one auditor.

The appointment of directors requires the approval of at least one-quarter of the total shares issued and half of the shareholders present at the general meeting. Therefore, it is interpreted that both Mars LP No. 1 and Ssangbangwool Group approved the appointment of the new directors. Had the Ssangbangwool Group opposed, the appointment of CEO Kim Ki-hoon would have been impossible.

In fact, there seems to be little reason for the current Ssangbangwool Group management to be deeply involved in B2En's operations. Ssangbangwool was acquired by Nature Republic on January 17, and it is scheduled to hold an extraordinary general meeting of shareholders on February 27 to appoint new executives. Most of the current management is expected to step down.

B2En's new executive directors include CEO Kim Ki-hoon, Han Joo-hyun (former director at Shinseong Construction), Kim Chul-gyun (former vice president at Coupang), and Yang Yong-ho (chairman of the Eurasia Business Association). The Eurasia Business Association, led by Chairman Yang Yong-ho, was indirectly involved in the Samwha Engineering & Construction stock manipulation scandal. Samwha Engineering & Construction’s stock price soared last year as it was considered a stock related to the Ukraine reconstruction theme. This is because Samwha Engineering & Construction signed a Memorandum of Understanding (MOU) with the Eurasia Business Association in 2022 regarding business cooperation for the Ukraine war recovery and reconstruction project. However, the Eurasia Business Association is a non-profit corporation and cannot guarantee participation in the Ukraine reconstruction project. Chairman Yang Yong-ho was in office at the time the MOU was signed between Samwha Engineering & Construction and the Eurasia Business Association.

The controversy over Samwha Engineering & Construction's stock manipulation arose when it was revealed that Lee Jong-ho, former CEO of Black Pearl Investment, mentioned "Check on Sam-bu tomorrow" in a group KakaoTalk chat room last May. Former CEO Lee Jong-ho is a figure suspected of being involved in the Deutsche Motors stock manipulation case. He has previously stated that "Sam-bu" did not refer to Samwha Engineering & Construction, but rather to the "3rd shift" (night operation hours) at a golf course.

Kim Chul-gyun, former vice president of Coupang, also has deep ties to the political world. During the Lee Myung-bak administration, he served as the Secretary for Public Communications and Secretary for New Media at the Blue House from July 2008 to September 2011. Last September, he was sentenced to one year in prison, suspended for two years, on charges including abuse of power. This was due to allegations that while he worked at the Blue House, he directed security organizations like the Defense Security Command to post pro-government content online.

B2En also recruited Shim Jae-cheol, a managing partner at the law firm JKL Partners, as an outside director. Attorney Shim, a former prosecutor, held various key positions during the Moon Jae-in administration, including Chief of the Anti-Corruption and 강력 Department at the Supreme Prosecutors' Office, Director of the Prosecution Bureau at the Ministry of Justice, and Chief Prosecutor of the Seoul Southern District Prosecutors' Office. After the launch of the Yoon Suk-yeol administration, he was transferred to a position considered a peripheral post, a research commissioner at the Institute of Justice, in May 2022, and eventually left the prosecution in July 2023.

The business community is focusing on B2En due to these numerous appointments of individuals with close political ties. Some analysts suggest that this may be to prepare for any potential political situations. Bizhankook contacted B2En to hear their position on this, but a B2En official stated, "There is currently no one in charge of responding to the media."