[Edaily Reporter Hyera Lee ] Allegations of breach of trust by all employees have surfaced at PNTMS ( People & Technology Ms, Inc.(257370)), a manufacturer of lithium-ion battery separators. Concerns about the company’s business competitiveness are also mounting as a decline in orders compounds an already sluggish market.
According to MP Doctor on the 13th, People & Technology Ms, Inc. closed at 2,160 won, down 315 won (12.73%) from the previous trading day.
People & Technology Ms, Inc. disclosed the allegations of breach of trust against three former employees through a public announcement on the 9th and a correction filed the following day. According to the announcement, the Western Branch of the Daegu District Prosecutors’ Office has indicted them on charges of breach of trust in the course of business.
According to legal sources, the indicted former employees were operational managers in key departments—including design, sales, and procurement—while they were employed at People & Technology Ms, Inc. (formerly Myeongseong TNS). Prosecutors believe that before resigning, these individuals established ST Youngwon—a company operating in the same industry—and then illegally removed key business assets, such as design blueprints for lithium-ion battery separator equipment, client information, cost data, and supply chain lists, using personal storage devices, and utilized them for their new business.
The issue is that, depending on the scale of the breach of trust, this case could lead to a substantive review of the company’s eligibility for listing. The Korea Exchange (KRX) may conduct a substantive review of listing eligibility if it determines that embezzlement, breach of trust, or similar acts have a significant impact on the company’s business continuity, management transparency, or investor protection. In this disclosure, the company also stated, “If the amount of the breach of trust—which can be specified at a later date—exceeds 5% of equity, it may constitute grounds for a substantive review of listing eligibility.”
An official from the KRX’s Disclosure Department explained, “Embezzlement or breach of trust by executives must be disclosed regardless of the amount, while for employees, we review whether to conduct a substantive review after disclosure only if the amount exceeds a certain threshold.” The official added, “In cases like this where the amount of the breach of trust has not been specified, we first disclose the fact that it occurred and then add the relevant details through a future amendment to the filing.”
However, the market is more concerned about the damage to the company’s core business competitiveness than about whether it will maintain its listing status. This is because earnings continue to decline amid a battery industry environment that shows no signs of improving anytime soon. People & Technology Ms, Inc. reported first-quarter standalone revenue of 763.59 million won and an operating loss of 1.48819 billion won. Revenue fell by approximately 81.7% year-over-year, and the company shifted to an operating loss. The annual performance is no different.
There is also a lack of large-scale new orders that could drive a turnaround. People & Technology Ms, Inc. has secured only one new supply contract so far this year. However, this contract is unrelated to the company’s core separator business. Furthermore, a series of recent issuances of convertible bonds (CBs) to secure operating funds is fueling concerns about the company’s financial burden.
A People & Technology Ms, Inc. official stated, “We have not yet calculated the extent of damages resulting from the breach of trust. We made the disclosure to enhance transparency of investor information,” adding, “Unlike embezzlement, it is currently difficult to specify the exact amount for breach of trust; we will likely need to review the valuation method and the scale of damages depending on how the case progresses, such as a potential transition to civil proceedings.”
Regarding business strategy, the official noted, “We are not required to disclose information for amounts below a certain threshold, so we are not currently making such disclosures, but our core business operations are proceeding as usual.” The official continued, “We plan to use the working capital raised through the issuance of convertible bonds to cover costs such as raw materials necessary for business operations,” and added, “Along with the recent appointment of a new CEO, we are also exploring new business opportunities, such as participating in defense artificial intelligence (AI) research and development (R&D) projects. We will do our utmost to enhance our competitiveness.”