Bond investors in JoongAng Group affiliates, including the general programming channel JTBC, have filed a criminal complaint against the controlling family, including JoongAng Holdings Chairman Hong Seok-hyun.

Law Firm Changcheon, representing 319 bond investors of JoongAng Group affiliates, held a press conference at the Seoul Bar Association building in Seocho-dong on September 9 and announced that it had submitted the complaint to the Seoul Southern District Prosecutors Office the previous day.

The complaint targets 20 individuals, including the controlling family—Chairman Hong, JoongAng Group Vice Chairman Hong Jeong-do, and Contentree JoongAng CEO Hong Jeong-in—as well as former and current CEOs of affiliates such as JTBC, and financial company executives and employees involved in selling the bonds. They face charges of violating the Capital Markets Act.

According to the defense counsel, JoongAng Group is a corporate group consisting of 55 domestic affiliates and 24 overseas affiliates, 54 of which, excluding Contentree JoongAng, are unlisted companies.

The defense counsel argued that the controlling family and management concentrated funds into unlisted affiliates that are not subject to business report submission and disclosure obligations, making it difficult for ordinary investors to track the flow of funds.

They claimed that the group repeatedly engaged in "rollover" transactions—where one affiliate acquires the securities of a financially troubled affiliate using the group's governance structure—to make financial statements appear sound.

Based on these inflated financial statements, the defense counsel estimated that individual investors suffered damages totaling at least 32.52 billion won.

"We concluded that this is not a matter of individual company distress, but rather a structural issue," attorney Shin Dong-hwan explained, detailing the reason for jointly filing the complaint against the controlling family and management.

Executives and employees of financial institutions who promoted the purchase of corporate bonds issued by JTBC and other companies without disclosing JoongAng Group's actual financial status were also included in the complaint.

The defense counsel added that given the specialized nature of the case, they have requested the prosecution to conduct a direct investigation.

The JoongAng Group financial crisis broke out after JTBC declared a default in June by failing to repay asset-backed borrowings totaling 20.6 billion won upon maturity.

Four JoongAng Group affiliates—JoongAng Holdings, Contentree JoongAng, JoongAng P&I, and Megabox JoongAng—commenced rehabilitation procedures, and while JTBC underwent Autonomous Restructuring Support (ARS) proceedings, the Seoul Bankruptcy Court decided to commence rehabilitation procedures for JTBC on August 28.

(Photo: Yonhap News)