2024-01-19 00:26:00
SM and Kakao cited for provisional injunction as urgent need for financing is not recognized
There seems to be a fight over ‘Why is it an allocation to a third party rather than an allocation to shareholders?’
(Seoul = Yonhap Infomax) Reporter Kim Hak-seong = The dispute between the founding family of Hanmi Pharmaceutical Group has expanded into a legal battle.
This is because the eldest son, Lim Jong-yoon, president of Hanmi Science (Chairman of Corey Group), along with his second son, Lim Jong-hoon, president of Hanmi Pharmaceutical, applied for a provisional injunction to prohibit the issuance of new shares in relation to the capital increase through third-party allocation by Hanmi Science to OCI Holdings.
The legal community believes that the key issue will be whether Hanmi Science’s paid-in capital increase falls within the ‘management purpose’ stipulated in the Commercial Act.
Hanmi Pharmaceutical Research Center
[출처: 연합뉴스 자료사진]
According to Corey Group’s official Jipyong Law Firm served as legal representation.
They are known to claim that there are procedural problems in the third-party paid-in capital increase for OCI Holdings worth 240 billion won announced by Hanmi Science on the 12th.
According to Article 418 of the Commercial Act, a company may issue new shares to non-shareholders only when necessary to achieve management purposes, such as introducing new technology and improving financial structure, as stipulated in the Articles of Incorporation. Article 10 of Hanmi Science’s Articles of Incorporation also stipulates similar content.
Hanmi Science stated that the purpose of the paid-in capital increase is “to improve the financial structure by quickly raising funds necessary for debt repayment and operating capital, and to establish a management cooperative relationship with OCI Holdings.”
This lawsuit has a similar structure to the preliminary injunction filed in February last year when SM Entertainment promoted the issuance of new shares and convertible bonds (CB) for Kakao.
At the time, when SM Entertainment’s board of directors decided to issue new shares and CBs equivalent to 9% of the total issued shares to Kakao, executive producer Lee Soo-man, the largest shareholder, said, “Even though there is no management need such as urgent financing or business expansion, we are issuing new shares to a third party. “Issuing it is illegal because it infringes on the preemptive rights of existing shareholders,” he said, and applied to the court for a provisional injunction to ban the issuance.
The court accepted this argument. The court ruled that it was difficult to believe that SM Entertainment needed to raise funds urgently enough to tolerate infringement on the ‘proportional interests’ of existing shareholders, and granted a temporary injunction.
In this preliminary injunction lawsuit, the two sides are expected to argue over whether Hanmi Science’s paid-in capital increase is for management purposes, such as introducing new technology and improving financial structure.
A lawyer in charge of corporate litigation at a large law firm said, “There is no urgent need to raise funds for all third-party paid-in capital increases.”
As of the end of the third quarter of last year, Hanmi Science’s debt ratio was 45% on a consolidated basis and 46% on a separate basis, which is not a very high level. Considering that the debt ratio has fluctuated around 40% every quarter, it is difficult to say that the financial structure has particularly deteriorated recently.
Lee Sang-hoon, a professor at Kyungpook National University Law School, said, “The key is whether you can answer why the capital increase was not allocated to shareholders but only to specific people,” and added, “If this logic does not stand, there is a high possibility that a provisional injunction will be issued.”
He added, “Because management rights disputes are a problem only for the relevant shareholders, it is difficult to serve as a management goal in and of itself.”
South Korea and the United States believe that there is a high possibility that the preliminary injunction will not be accepted.
An official from Hanmi Pharmaceutical Group said, “Our legal review is that there is no problem with the requirements, so the possibility of obtaining a preliminary injunction is very low.” He added, “We will strive to proceed with the integration process smoothly so that the purpose of partnership and win-win joint management is well reflected.” .
He added, “The legal representative has not yet been confirmed, and we plan to review legal action in detail following receiving the complaint.”
Some are raising the possibility that Kim & Chang and Sejong, which served as legal advisors during the group integration process of Hanmi Science and OCI Holdings, may represent Hanmi.
The results of this provisional injunction are expected to come out at the latest before the end of April, the date of payment for new shares. Last year, the injunction once morest SM Entertainment and Kakao was concluded three days before the payment date.
Lim Jong-yoon, President of Hanmi Science
[출처: 연합뉴스 자료사진]
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This article was published at 09:23 on the Infomax financial information terminal.
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