Upstage: "Ha Jungwoo's Stock Disposal Was According to Contract... Not a Parking Transaction"

"4,444 Shares Automatically Returned Before Vesting Period Ended"

"Parking Transactions Impossible... Used Only for Recruitment and Employee Compensation"

Upstage clarified the controversy surrounding Ha Jung-woo, the Democratic Party candidate for the Busan Buk-gu Gap National Assembly by-election, and his past stock disposal, stating, "It was a normal execution of obligations according to the law and contract," and moved to correct the facts.

On June 3rd, Ha Jung-woo, the Democratic Party candidate for the Busan Buk-gu Gap by-election and former Senior Secretary for AI Future Planning at the Blue House, visited Gupo Market in Busan Buk-gu. Photo by Kang Jin-hyung

On the 20th, Upstage issued an official statement explaining that immediately after Ha assumed his position as Blue House AI Secretary in August of last year, he sold a portion of his shares to CEO Kim Sunghoon, the largest shareholder, at face value (100 won) in accordance with the Public Service Ethics Act and a shareholder agreement.

Upstage further explained that when Ha worked at Naver in 2021, he served as an external AI education advisor with the company's official approval. As compensation, he was granted 10,000 shares at face value, adding, "It is extremely common for startups to give early-stage shares in the form of vesting (conditional stock options) instead of cash compensation for advisory roles in the early stages." The shares were subject to a mandatory holding period of six years (ownership confirmed in proportion to three years following a minimum three-year term).

However, after Ha was appointed as AI Secretary, the 10,000 shares could not be held for the entire mandatory period. Upstage explained that 5,556 shares, which became fully owned by Ha after the mandatory holding period, were placed in a blind trust in accordance with the Public Service Ethics Act. The remaining 4,444 shares were automatically returned to the largest shareholder at face value (100 won) as stipulated in the shareholder agreement.

Upstage also categorically denied the "parking" (nominee ownership) suspicion raised by some opposition figures. The company stated, "The returned shares are clearly specified in the contract to be used solely for talent recruitment and employee compensation, and not for the CEO's personal ownership," adding, "Claims of private misuse or parking transactions do not hold up in the first place."

Additionally, the company noted, "During this sensitive pre-election period, we refrained from active explanations to avoid further misunderstanding, but we felt compelled to correct the facts as it is regrettable that the sincerity of a company dedicated to the advancement of Korea's AI industry is being distorted into a political issue." Upstage added, "We do not wish for baseless suspicions and speculation to have a negative impact on the Korean AI industry at this most critical juncture."

Previously, Ha's camp also issued a separate statement, asserting, "No one has adhered more strictly to legal obligations arising from public office," and argued, "(The allegations) are groundless claims made without any understanding of the basic investment structure of startups and the mechanisms of stock options." They added, "If the dissemination of false information continues, we will take legal action."

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