Invest3 publishers2 min readPublished
KDB puts its 'Assassin(s)' film investment on the fund manager it backs
Korea Development Bank said the fund manager it backs chose to put 400 million won into 'Assassin(s)', while IBK defended its direct 2 billion won stake. About 93% of the 30.65 billion won a lawmaker questioned moved through bank-backed funds, the layer where KDB says it cannot take part.
The Investor · Invest desk
What happened
- Both banks deny outside pressure, and IBK says its dedicated department reviewed the film under the same procedures it uses for other projects.
- Funds backed by IBK and KDB put 14.25 billion won and 14 billion won respectively into Hive Media Corp., the film's production company.
- People Power Party Rep. Joo Jin-woo released the investment records this week and called for an investigation into whether political pressure was involved.
- Hur Jin-ho's film, released Sept. 23, depicts the 1974 attempt on Park Chung-hee that killed first lady Yuk Young-soo, a portrayal the PPP calls a distortion of history.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- constraint Any inquiry into KDB's 14.4 billion won has to go through Company S and the fund's documents, since KDB says it supplied capital without a part in choosing targets.
- exposure IBK's 2 billion won, about 6.5% of the total, is the one decision a bank says it made itself, so its review department's file is the part of the record a lawmaker can test directly.
- precedent If KDB's position goes unchallenged, state-bank capital can reach politically disputed productions through funds without the bank owning the choice of target.
Adding up the four figures in Joo's documents gives 30.65 billion won [1]. Only 2.4 billion won of that, about 7.8%, went into the film itself. The other 28.25 billion won, about 92%, bought into Hive Media Corp., the company that made it [2]. The producer stakes are roughly 12 times the film stakes [3].
By bank, IBK's side comes to 16.25 billion won and KDB's to 14.4 billion won [4], though the split by who made each decision is the more useful one. IBK put its 2 billion won in directly after its own review [10][2], and said "The allegation that the investment was decided at an outside request or through an abnormal process is not true" [3]. It is the only sum a bank says it chose itself, about 6.5% of the total. The remaining 28.65 billion won, about 93.5%, went through funds [5].
KDB's defense is that it supplied the capital and the manager picked the deal [4]. "Decision-making and follow-up management on individual investments by a fund are the exclusive responsibility of the asset manager," KDB said, according to Seoul Economic Daily's translation, adding that "KDB cannot take part in the investment process" [5][6]. By arguing this way, KDB also gives up any claim to have vetted what its money bought. IBK's statement, as both outlets report it, concerns its direct stake. The fund-manager argument is the one that would have to cover the 14.25 billion won the IBK-backed fund put into Hive Media [11].
The record supports three readings. Joo's request could end without an inquiry, leaving the two statements as the account [9]. An inquiry could ask for the fund documents, which would move the questions to Company S, the manager Seoul Economic Daily names for KDB's fund [7], and to whoever runs the IBK-backed fund. Or scrutiny could narrow to IBK's 2 billion won, the one sum backed by a bank's own review file [2].
I'd expect the second, because the producer stakes hold 28.25 billion won [2]. KDB's defense holds for its 400 million won and its 14 billion won as long as the fund terms say what KDB says they do [10][11]. Documents showing the bank suggested Hive Media or the film to its manager, or a fund set up with this target already named, would break it [4]. Neither bank disclosed the funds' sizes, its share of their capital, or the terms setting out what it could direct.
What to watch
- Whether Joo's call turns into a formal investigation that requests the documents of Company S and of the IBK-backed fund.
- Whether either bank discloses its share of the funds' capital or any rights over target selection written into the fund terms.
- Whether IBK says who decided the 14.25 billion won its backed fund put into Hive Media, separately from its direct stake.