Fadu創辦人Lee Ji-hyo在IPO估值爭議審訊期間創立AI初創公司

Lee Ji-hyo, former CEO of Fadu. (Photo: Fadu)

Former Fadu CEO Lee Ji-hyo, who stepped down amid controversy over the company’s allegedly inflated IPO valuation, has established an artificial intelligence (AI) startup six months after resigning as CEO.

The move has raised questions about whether and when Lee might sell his Fadu stake, worth about 300 billion won, after the lock-up period on his shares expired.

According to industry sources on Oct. 15, Lee founded AI startup Abundance in August. The company is headquartered in Seoul’s Gangnam district with paid-in capital of 10 million won. Its registered business activities include information and communications services and management consulting.

After news of the venture emerged in media reports, Lee posted on social media on Oct. 14, confirming his departure from Fadu and outlining his plans for the new business.

“Despite the twists and turns, we fully achieved our goal of creating world-class products with talented Korean engineers and proving ourselves in the global market,” Lee wrote. “Fadu has now reached the stage where it needs to nurture and grow the business opportunities it has secured.”

“I realized that steadily expanding on achievements already made is not what I do best,” he added. “I want to work with talented Korean engineers to help change the world, from AI data centers to AI models.” Lee said he left Fadu in August.

Lee holds approximately 4.46 million Fadu shares, representing a 9% stake, making him the company’s second-largest shareholder after CEO Nam Yi-hyun, who owns 12%. The stake was worth about 295.8 billion won based on the previous day’s closing price of 66,300 won. The mandatory lock-up period on the shares expired in August.

Fadu listed on South Korea’s Kosdaq market in August 2023 at a valuation of 1.5 trillion won, projecting annual revenue of around 120 billion won. However, revenue disclosed shortly after the listing amounted to just 59 million won in the second quarter and 321 million won in the third quarter. Full-year revenue reached only 22.5 billion won.

Prosecutors indicted Lee, Nam and Fadu as a corporate entity on Dec. 18 last year on charges of violating the Capital Markets Act, alleging that management proceeded with the IPO despite knowing that major customers had suspended or reduced orders. During the trial, prosecutors argued that Fadu failed to revise its revenue forecasts despite being aware that SK hynix had notified it of a halt to additional orders and that SpaceX had suspended orders. The trial is underway at the Seoul Southern District Court.

Lee resigned as CEO in February, on the day the Korea Exchange decided to resume trading in Fadu shares. At the time, Fadu said in a shareholder letter that Lee would step down from the board but remain with the company and continue fulfilling responsibilities necessary for its stability and growth. Six months later, in August, Lee left Fadu and established his new company.

“Regardless of the legal issues, if the founder sells his stake while questions over accountability for the IPO controversy remain unresolved, it could undermine market confidence,” an investment industry official said. “With the trial ongoing, he needs to clarify his position on retaining his shares.”

THE ELEC contacted Lee to ask whether he plans to retain his Fadu shares while the trial is underway but received no response.