"Spending 37 Times Its Net Assets": JTBC Faced Severe Financial Crisis

As key affiliates of the JoongAng Group, including JTBC, have filed for court receivership due to a liquidity crisis, financial authorities are investigating whether corporate bonds and electronic short-term bonds issued by JTBC were sold through mis-selling practices.

According to financial authorities, the Financial Supervisory Service (FSS) is focusing on whether there was any mis-selling, specifically examining the adequacy of due diligence by underwriters and potential violations of the duty to disclose financial risks during the issuance of JTBC's corporate bonds and electronic short-term bonds.

The scope of the inspection includes corporate bonds, electronic short-term bonds, and commercial paper issued by JTBC last year and this year.

According to the 2025 business report submitted by JTBC to the FSS, the company issued a total of 259 billion won in corporate bonds, electronic short-term bonds, and commercial paper last year.

Furthermore, JTBC issued an additional 93 billion won in unsecured public bonds as recently as February of this year, just four months before its key affiliates filed for court receivership.

The FSS is focusing on whether the securities firms involved sufficiently verified JTBC's financial situation and the group's overall liquidity risks at the time of issuance, and whether they properly explained these risks to investors.

According to the business report, JTBC's accumulated deficit on a consolidated basis stood at 703.3 billion won at the end of last year, while its total equity was only 19 billion won.

This indicates a severe situation where the company's accumulated losses were 37 times greater than its remaining net assets.

If JTBC or the underwriters were aware of the possibility of a rapid deterioration in the company's finances or the risk of entering court receivership but failed to properly disclose this in the investment prospectus, or if they downplayed the risks to attract investors, it could constitute mis-selling.

In particular, asset-backed electronic short-term bonds have been identified as a direct cause of this liquidity crisis, a structure similar to that of Homeplus, which also underwent court receivership.

JTBC failed to repay 20.6 billion won in asset-backed loans at maturity—5.6 billion won through the special purpose vehicle (SPV) Miru Secondary and 15 billion won through Jeil JTBC Secondary. Consequently, its long-term credit rating plummeted from BBB to CCC, and its short-term rating fell from A3 to C, both reaching speculative grade levels, which triggered the liquidity crisis.

Asset-backed electronic short-term bonds are a method where a company transfers its assets or receivables to an SPV, which then issues short-term bonds based on those underlying assets to raise funds from investors.

It is a structure that secures cash by accelerating future cash flows through a type of "paper company."

In addition to the 20.6 billion won that matured on June 12, hundreds of billions of won in loans were scheduled to mature next month; however, with the commencement of court receivership, the repayment process is expected to be effectively halted.

Reported by Kim Minjeong | Video by Ahn Jun-hyeok | Graphics by Lee Soo-min | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.