[Edaily Reporter KIM SAE-MI ] ENZYCHEM LIFESCIENCES CORPORATION(183490)is facing backlash from minority shareholders as it pushes for a board restructuring and amendments to its articles of incorporation while its shares remain suspended due to a refusal to issue an audit opinion. The key points of contention are the company’s move into the real estate business—which is far removed from its core biotech operations—and the introduction of a chief executive officer (CEO) system.

From Land Development to the Chief Executive Officer System… What Are the Key Issues at the Extraordinary General Meeting?

According to the biotech industry on the 8th, ENZYCHEM LIFESCIENCES CORPORATION plans to hold

an extraordinary general meeting of shareholders

on the 23rd to propose the appointment of directors and auditors, as well as partial amendments to the articles of incorporation.

Previously, Engichem CO.,LTD’s stock trading was suspended after it received a “disclaimer of opinion” from its auditor for the 2025 fiscal year, which constituted a formal ground for delisting. The company was granted a grace period on April 10 of this year, and the trading suspension is expected to continue until April 10 of next year.

The proposed amendments to the articles of incorporation include the addition of business purposes such as: △ the acquisition, ownership, and development of land; △ the design, manufacture, and installation of modular homes and temporary lodging facilities; △ the operation and leasing of temporary lodging facilities for industrial complex workers; and △ the management of convenience stores, restaurants, laundromats, and dormitories. The amendments also establish the legal basis for introducing a Chief Executive Officer (CEO) system and remove provisions for severance pay—which would have required the payment of 20 billion won to the CEO and 10 billion won to inside directors in the event of their dismissal due to a hostile merger or acquisition.

The Shareholders’ Alliance is taking issue with the fact that candidates recommended for internal director positions have backgrounds that are more prominent in land, construction, and industrial complexes than in biotech R&D. Candidate Han Sang-chang previously served as the chairman of the Yongin Wonsam Consultative Association and as the secretary-general of the Emergency Response Committee for the Yongin Semiconductor Cluster. Candidate Byun Ju-young served as a director of Hanchem CO.,LTD’s New Business Division and previously held positions such as CEO of Architecture Think and head of a facility improvement project for a Tier 1 supplier to HyundaiMotor and KIA CORPORATION.

In response, the company drew a clear line, stating that no specific real estate projects or investment plans have been finalized. A HANCHEM CO.,LTD official said, “Since it is difficult to generate revenue from new drug development in the short term, we have established provisions in the articles of incorporation to allow for a broad review of stable cash cow candidates in order to resume trading and ensure the company’s viability,” adding, “We have also formed a separate investment review committee to prevent reckless investments.”

The differences in perspective regarding the Chief Executive Officer (CEO) system were even more pronounced. According to the agenda, if executive officers are appointed, the company may appoint a CEO by resolution of the board of directors without appointing a representative director. The CEO executes company business within the scope determined by the board of directors.

The Shareholders’ Alliance argues that if the board of directors is composed primarily of existing management and their allies, the board could make all substantive decisions while shifting operational responsibility solely to the Chief Executive Officer. They point out that since the board—rather than the shareholders’ meeting—appoints and dismisses the Chief Executive Officer, shareholder oversight could be weakened.

The company countered, stating, “We have not yet implemented the Chief Executive Officer system or identified any candidates,” and added, “This is an institutional foundation to prepare for various future scenarios, such as the appointment of professional managers, and to strengthen the checks and balances between execution and oversight.” The company maintains that, given the stock exchange’s rigorous scrutiny of internal controls and corporate governance, there is no reason to introduce this system merely to allow the existing management to evade responsibility.

The newly established Article 36-4 of the Articles of Incorporation is also open to controversy. In addition to general trade secrets, the scope of confidentiality obligations for executive officers and the Chief Executive Officer specifically lists materials related to re-audits, responses to the stock exchange, as well as documents concerning fund disbursement, accounting, and legal reviews. This could potentially restrict access to and oversight of internal information during the improvement period. In response, a Hanchem CO.,LTD official stated, “This provision was drafted following review by a law firm.”

The removal of the “golden parachute” clause is the result of partially reflecting shareholders’ demands. A representative of the Minority Shareholders’ Alliance noted, “We demanded that the company simultaneously abolish both the severance pay clause and the supermajority voting system, but this proposal only includes the removal of the severance pay clause.”

Solutions for Resuming Trading Remain at an Impasse… Restructuring vs. Attracting External Management Entities

Regarding the

solution for resuming trading

in Engichem CO.,LTD, the positions of the company and the Small Shareholders’ Alliance remain at an impasse. The company emphasizes that the realistic approach to resuming trading is to strengthen internal control mechanisms within the current management structure and, through amendments to the articles of incorporation, open the door to a professional management system and the possibility of securing a stable cash cow. In contrast, the Shareholders’ Alliance maintains that the company must first hold the existing management accountable for causing the adverse audit opinion, replace the board of directors, and then normalize the company through investment and management participation by an external entity.

First, if a proxy battle were to take place at the extraordinary general meeting, the company would hold an overwhelming advantage. While the stake held by small shareholders, as tallied by the “ACT” platform, stands at 14.15%, the Shareholders’ Alliance estimates that the actual friendly stake is around 11%. In contrast, the company is reported to have secured a majority of voting rights, including friendly stakes.

Recently, the Shareholder Alliance submitted a shareholder proposal via certified mail demanding the removal of Chairman Song Ki-young and Vice Chairwoman Kim Hye-kyung from the board and the appointment of seven new directors. However, since the deadline for submitting proposals—six weeks prior to the shareholders’ meeting—was not met, the company maintains that it is difficult to include the proposal on the agenda. In response, the Shareholder Alliance has also filed for a preliminary injunction to prohibit the convening of the extraordinary general meeting.

The Shareholders’ Alliance is working with an external project management (PM) firm to identify a company that could help resume trading. They are considering a plan whereby, after the board is replaced, an external company would invest through a third-party private placement or similar means to become the new management entity, at which point the directors recommended by the Shareholders’ Alliance and the PM firm would step down. However, specific acquisition candidates or the transaction structure have not yet been finalized.

Both sides are urging shareholders to make wise choices to help Engichem CO.,LTD resume trading. An Engichem CO.,LTD official stated, “These amendments to the articles of incorporation and the reorganization of the board of directors are being pursued to strengthen internal controls and ensure business stability in order to resume trading,” adding, “We hope shareholders will make wise decisions to normalize management and resume trading.” The representative of the Minority Shareholders’ Alliance emphasized, “We hope shareholders will exercise their voting rights after carefully considering who can responsibly lead the resumption of trading and the normalization of the company.”