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Actor Bae Yong-joon makes exit from own 14-year-old company

March 15, 2018
South Korean Actor Bae Yong-joon speaks at an event in Chiba, Japan on Oct. 20, 2013, to mark the 10th anniversary of the arrival of Hallyu, or the Korean Wave, in Japan. (Yonhap)

South Korean Actor Bae Yong-joon speaks at an event in Chiba, Japan on Oct. 20, 2013, to mark the 10th anniversary of the arrival of Hallyu, or the Korean Wave, in Japan. (Yonhap)

SEOUL, March 14 (Yonhap) — Actor and businessman Bae Yong-joon’s sale of his entire stake in Keyeast Co. to South Korean entertainment giant S.M. Entertainment has raised questions in the industry over the rationale and circumstances behind the unexpected disposal.

S.M. Entertainment said in a regulatory filing on Wednesday that it will purchase Bae’s 25.12 percent stake in Keyeast Co. for 50 billion won (US$47 million). Bae is the largest stakeholder in Keyeast.

S.M. said it will pay 15 billion won of the total in cash, while Bae will receive newly created S.M. shares equal in value to the remaining amount.

Bae has turned himself into a successful businessman.

He established a company called BOF in 2004 on the back of huge success of the 2002 drama “Winter Sonata,” in which he starred in. He subsequently became a huge sensation across Asia, especially in Japan — so much so that his Japanese fans made a pilgrimage to the company in Seoul.

In March 2006, Bae bought a stake worth 9 billion won to become the biggest shareholder of the listed Korean firm Auto Wintech. He changed the company name to Keyeast. BOF was later absorbed by Keyeast.

In 2009, he entered the Japanese market by merging BOF International, which he founded in 2008, with DA, a Japanese distributor of digital content.

While growing his businesses in both Korea and Japan, he also worked actively on the small and big screens. He appeared in the romantic movie “April Snow” in 2005 and the historical fantasy TV series “The Legend” in 2007.

However, the much-anticipated TV blockbuster failed to live up to public expectations and Bae has become more heavily involved in running businesses in and out of the country.

In 2014, he advanced his business interests to China by striking a strategic partnership with Sohu.com Inc., which bought a 6.4 percent stake in Keyeast to become the second largest shareholder after Bae. The deal was struck largely due to the fact that Keyeast manages actor Kim Soo-hyun of “My Love from the Star,” which was a runaway success in China.

But the entertainment markets in Japan and China have in recent years been sluggish for various reasons, including China’s ban on Korean culture in retaliation against a U.S. missile defense system deployed in South Korea. The company was dealt another blow when Kim started his mandatory military service in July last year, temporarily suspending all activities. All South Korean men are required to do around two years’ service in the military.

South Korean actor Bae Yong-joon attends a ceremony to mark new conscripts' entry into the Army at a boot camp of the Army's 30th Division in Goyang, northwest of Seoul, on May 12, 2015. He attended to see off his agency's client Kim Hyun-joong, who is also a South Korean singer and actor. (Yonhap)

South Korean actor Bae Yong-joon attends a ceremony to mark new conscripts’ entry into the Army at a boot camp of the Army’s 30th Division in Goyang, northwest of Seoul, on May 12, 2015. He attended to see off his agency’s client Kim Hyun-joong, who is also a South Korean singer and actor. (Yonhap)

Also last year, his image suffered upon news that Bae’s actress wife, Park Soo-jin, had received favorable treatment from the local hospital where she gave birth to their first child. Separately, minority shareholders demanded the company’s management, including Bae, take responsibility for a dent in the company’s share prices.

Some industry sources suspect this series of events has caused Bae to want to step aside from management, while others believe it is a strategic, well-thought-out step for him to seek other opportunities as a businessman.

Meanwhile, S.M. Entertainment reportedly moved quickly for the buyout, which happened in the span of only a week, and details have yet to be hammered out between the two companies regarding issues such as staffing and talent management.

Keyeast manages popular actors like Son Hyun-joo and Han Ye-seul, and its subsidiary Content Y manages Park Seo-joon, Hong Soo-hyun and Goo Ha-ra.

The company’s another subsidiary, Content K, has produced TV series such as “Dream High” and “Ohlala Couple.” It is currently working on “Pretty Sister Who Buys Me Food,” set to premiere later this month. Its Japanese subsidiary DA runs the Korean entertainment channel KNTV and Asian one DATV.