'Jang Wonyoung Lens' Accused of Consumer Inducement and Mediation... Which VC Invested?

PPB Studios Subsidiary Wink Company Faces Indictment
Vision Equity Partners, JW&Partners Among Investors

Wink Company, a subsidiary of contact lens company ppb studios, is under investigation by the prosecution for allegedly inducing and referring contact lens consumers to affiliated optical shops. Under current law, it is prohibited to solicit, introduce, or induce customers to specific optical businesses or opticians for profit.

[Image source=Hapa Kristin homepage]

According to sources from the venture capital (VC) industry and legal circles on the 11th, the Seoul Central District Prosecutors' Office recently took over the investigation from the police regarding the medical technician law violation charges against Wink Company, a 100% subsidiary of ppb studios, and its CEO A. The prosecution will decide whether to indict after reviewing the case.

ppb studios was established in December 2011. It operates the color contact lens brand Hapacristin, famous for the so-called 'Jang Wonyoung lenses.' Last year, it recorded sales of 27.9 billion KRW and an operating loss of 4.3 billion KRW. Sales decreased by 41.92% compared to the previous year, and operating profit turned negative. Wink Company, a subsidiary of ppb studios, also sells lenses and other products.

The allegations against Wink Company, initially filed with the Seoul Suseo Police Station, were mainly twofold. First, the online sale of contact lenses. Currently, purchasing contact lenses online is illegal. The accuser claimed that Wink Company's practice of taking pre-orders online and then having customers visit optical shops to pick up the products, an O2O (Online to Offline) sales method, is illegal.

A representative from the law firm Sejong, representing the accuser, stated, "Although the reality is that the defendant company, not the optician, sells the contact lenses, they tried to evade the law by merely entrusting the payment and product receipt to the optician." They added, "Despite not being opticians, they performed related tasks without the necessary licenses by selling contact lenses to an unspecified number of consumers."

The charge of consumer inducement and referral has been forwarded to the prosecution. According to the accuser, Wink Company continuously posted advertisements on social networking services (SNS) to direct consumers to its beauty lens commerce platform 'Wink.' Then, it had affiliated opticians purchase contact lenses and received a portion of the sales proceeds from the contact lenses sold through Wink. The current Medical Technician Act stipulates that "no one shall solicit, introduce, or induce customers to specific optical shops or opticians for profit."

If this case goes to trial, it is expected to affect the VCs that invested in ppb studios. The value of the shares held by VCs in ppb studios could change depending on the trial outcome. Especially since ppb studios attracted customers through online promotions, if illegality is recognized, it could severely impact business operations. Wink Company recorded sales of 6.7 billion KRW and an operating loss of 600 million KRW last year. Although this accounts for about 24% of ppb studios' total sales, it has rapidly grown, increasing by 256.24% from 2.6 billion KRW the previous year.

Currently, the major shareholders of ppb studios are Vision Equity Partners and JW&Partners. Last year, LB Investment secured shares in ppb studios using LB Next Innovation Fund No.1 (38.5%) and LB Innovation Growth Fund (10.9%). Subsequently, Vision Equity Partners invested approximately 50 billion KRW to acquire a 42% stake, while JW&Partners and existing investor Joy Warrior jointly acquired 10% of the shares. The value of ppb studios in this acquisition is estimated to be about 110 billion KRW.

A VC industry insider said, "If legal litigation affects business, it can also change investment value. If the company proceeded without disclosing this situation, the contract could even be canceled." A ppb studios representative said, "We have nothing special to say regarding this incident."

This content was produced with the assistance of AI translation services.