Singer Kim Ho-joong. Kyunghyang Shinmun file photo

It has been confirmed that the strong results recently announced by Art M&C (formerly Think Entertainment), the agency of singer Kim Ho-joong who is serving a prison sentence, are directly at odds with the official external audit results.

According to the disclosed audit report by Seongun Accounting Corporation confirmed on the 22nd, revenue at Art M&C for fiscal 2025 was 4.13 billion won, with a net loss of 2.72 billion won.

This stands in stark contrast to what the company touted just a day earlier, on the 21st, stating, “Leaping to an integrated entertainment group through M&A, we achieved 2025 revenue of 13.0 billion won and net profit of 5.0 billion won.”

In addition, total equity fell from about 11.6 billion won at the start of 2024 to 3.6 billion won at the end of 2025, a plunge of around 8.0 billion won, undercutting the company’s promotion that “corporate value is higher than before the Kim Ho-joong incident.”

Suspicions were also raised over the valuation of the stake held by Kim Ho-joong. The company claimed that “the value of the 7.43% stake held by Kim Ho-joong is about 5 billion won.” This led to public chatter that he was sitting on a 5 billion won cushion of cash even while incarcerated. However, it is difficult to find supporting evidence for this in the disclosure materials.

Although Kim Ho-joong was not a shareholder as of the end of 2025, he appears to have been added as a shareholder through a paid-in capital increase this past January. This is presumed to be the background for the company asserting ‘Kim Ho-joong as a major shareholder.’ In response, an Art M&C official told this paper, “We paid him settlement money, and then (Kim Ho-joong) purchased shares.”

However, in the disclosure materials, Kim appears not as a shareholder but as a creditor who lent the company 1 billion won. That borrowing was already repaid on January 7 by offsetting it against the paid-in capital subscription amount.

Art M&C, formerly named Think Entertainment, announced in May 2024when allegations arose that Kim Ho-joong committed dangerous driving causing injury and fledthat all executives and employees would resign and all exclusive contracts with affiliated artists would be terminated.

Subsequently, on June 20 of the same year, it changed its name to Art M&C, stating, “We decided not to continue the management business after causing social controversy.” It added, “We only changed the name to signify that we will not conduct a management business; there is no hidden intention or trick.”

Regarding the points raised about its performance, an Art M&C official explained, “From the perspective of numerical accounting treatment, we proactively recognized impairment on certain existing assets such as subsidiary equity and loans,” and added, “These are non-operating losses unrelated to qualitative business activities, and by voluntarily, not under compulsion, carrying out transparent and conservative accounting, we sought to enhance the reliability of accounting information.”

The official also said, “In terms of corporate value as well, what matters more than book equity capital is the consolidated operating profit and loss that demonstrates cash-generating ability as a going concern,” and “Art M&C has posted operating profits for many years annually, and, with a leap in consolidated operating profit expected through new M&A, there is ample basis for our corporate value.”

On a separate (non-consolidated) basis, operating profit was about 2.5 billion won, but after reflecting the decline in the value of subsidiary stakes (an impairment loss on available-for-sale securities of about 4.99 billion won), the final tally was a net loss. This is why critics say the company conflated operating profit with net income and announced estimates for subsidiaries not yet consolidated as if they were finalized results.

Attorney Noh Jong-eon (Law Firm Jonjae) pointed out, “In a situation where total capital stands at 3.6 billion won, the assertion that the value of the 7.43% stake held by Kim Ho-joong alone amounts to 5 billion won is materially inconsistent with objective accounting figures,” adding, “Such misleading conduct is a grave matter that can undermine trust in the capital market and inflict enormous harm on good-faith investors.”

He also said, “Additionally, this is an area where the agency could seriously harm the credibility of the artist without accounting grounds, so caution is needed.”