이 기사는 2020년 01월 31일 08:00 thebell 에 표출된 기사입니다.

South Korea’s Mirae Asset Global Investment Private Equity (Mirae Asset PE) is facing reputational risk. The PE firm is in the middle of a legal fight with Doosan Infracore over the investment in Doosan Infracore China (DICC) while the firm’s former and current executives went on trial for an illegal transaction.

According to M&A industry sources on January 22, South Korea’s newly formed PE firm WJ Private Equity (WJ PE) plans to form a consortium with JKL Partners to invest in South Korea’s aircraft part manufacturer Yulkok. What catches attention is that WJ PE is founded by Jang Won-jae, former Mirae Asset Global Investment’s private equity investment executive.

Jang managed investment portfolios including The Coffee Bean & Tea Leaf and DICC at Mirae Asset PE. He has been in the legal battle with Doosan Infracore over the investment in DICC since 2016.

A group of financial Investors (FIs) of DICC, including Mirae Asset PE, IMM PE, and Hana Financial Investment PE filed a lawsuit against Doosan Infracore seeking payment of the share purchase and sale price, arguing that Doosan Infracore had the obligation to purchase the investors’ shares of DICC at the price of 700 billion won, the amount that the FIs expected to receive in connection with the failed investment exit. FIs lost in the first instance trial but the appellate court rendered a ruling which accepted all of the claims made by the FIs. They are waiting for the final ruling on the case to be delivered.

Market watchers worry about the departure of key managers who were responsible for the investment in the middle of the legal battle. “Limited partners who invested in Mirae Asset PE would certainly not be happy with the departure of the firm’s key men while the trial is still in progress,” said an M&A industry source. “There are some questions to be answered like why Mirae Asset PE let Jang go, and how Jang formed his new PE after leaving the firm. It seems that they concerned about reputation risk, given the fact that Jang is not on the WJ PE’s company registration certificate,” explained the source.

In addition to the DICC case, Mirae Asset PE is related to the lawsuit over the sale of South Korea’s game company YD Online. Mirae Asset PE’s former CEO Ryu Jung-hun and a current executive went on trial. South Korea’s prosecutors alleged that they were part of the illegal transaction, which will have a negative impact on the firm’s reputation.

Heavier burdens will be imposed on Mirae Asset PE if the trial gets prolonged. While the YD Online trial has been ongoing since August of 2019, the latest trial took place on January 20.

(By reporters Kim Byung-yoon and Choi Ik-hwan)