[THE INVESTOR] Korean entertainment agency Fantagio’s stock prices took a hit on June 20, after its biggest shareholder Gold Finance Korea sold 18.7 percent of its shares.

Fantagio shares closed at 694 won (US$0.63), down 11.03 percent from 780 won a day before. Today, it rebounded by over 4 percent to close at 725 won.  

Fantagio stock prices started to slump on June 11 due to the concerns of unstable management triggered by the stake sale of Gold Finance Korea, the local unit of Chinese conglomerate JC Group -- it now owns 31.3 percent stake down from the previous 50.07 percent. 

After losing 32.4 percent during June 11-15, prices bounced back by 13.7 percent on June 19 after Fantagio said JC Group is not planning to give up management rights. Prices dropped again just a day later due to lingering concerns that the Chinese investor may sell off its remaining stake after its lock-in period ends on Sept. 1.

Gold Finance, however, dismissed such concerns. “Our CEO has clearly stated that we will not sell anymore stocks,” a company spokesperson told The Investor. “Our current sale was to streamline our foreign investment portfolio.” 

The official added that on June 18, it appointed Park Hae-sun, the chairman of entertainment firm Box Media, as a registered board director to expand Fantagio’s business overseas. Moreover, it appointed Xiang Yang, the expert in Japanese entertainment business, as to strengthen the Fantagio's oversea business.

In 2016, Fantagio announced that it handed over around 13.52 million shares worth 30 billion won to Gold Finance Korea. After the acquisition, JC Group removed Fantagio’s founder and co-CEO Na Byeong-joon. 

Wei Jie, who used to co-lead Fantagio with Na, currently manages the company alone. According to sources, this transition was not smooth and caused some difficulties for the Chinese firm to manage Fantagio as the company’s artists and employees opposed Na’s sudden dismissal.

Fantagio was established in 1991 and is currently managing famous artists and K-pop bands including Weki Meki, Astro and Seo Kang-jun.

By Song Seung-hyun (ssh@heraldcorp.com)