[Edaily Reporter Kim Hyung-il ] The largest shareholder of PPI. INC(062970), a company engaged in optical communication components and related materials and parts, has changed from DeepMind Platform(223310)to the Nakamoto Investment Consortium. Mr. Kim Byung-jin is the sole investor in the new largest shareholder, the Nakamoto Investment Consortium. Mr. Kim is the CEO of Flake and a director of KOREA ADVANCED MATERIALS.

According to the Financial Supervisory Service’s electronic disclosure system on the 27th, KOREA ADVANCED MATERIALS announced that its largest shareholder had changed from Satoshi Holdings to the Nakamoto Investment Partnership the previous day. Of the 3,466,056 shares (12.14%) of KOREA ADVANCED MATERIALS held by Satoshi Holdings, 2,214,710 shares (7.75%) were acquired by the Nakamoto Investment Fund and 1,251,346 shares (4.38%) were acquired by Flake. The total transaction amount was approximately 10.5215 billion won.

As a result of this transaction, the largest shareholder of KOREA ADVANCED MATERIALS shifted from Satoshi Holdings to an investment fund affiliated with Mr. Kim. The Nakamoto Investment Fund consists of two investors, and its total assets amount to 6.8 billion won. According to the disclosure, Mr. Kim is the largest investor, holding a 100% stake.

Mr. Kim also played a role in a convertible bond (CB) transaction between KOREA ADVANCED MATERIALS and Satoshi Holdings last year. Last year, KOREA ADVANCED MATERIALS acquired 4 billion won worth of the 10th Series CB issued by Satoshi Holdings, then transferred it to Flake in December of the same year. At that time, Mr. Kim was also the CEO of Flake.

In other words, while Satoshi Holdings was the largest shareholder of KOREA ADVANCED MATERIALS, KOREA ADVANCED MATERIALS purchased Satoshi Holdings’ convertible bonds, which were subsequently transferred to Flake, where Mr. Kim served as CEO. Now, the Nakamoto Investment Partnership, in which Mr. Kim is an investor, has become the largest shareholder of KOREA ADVANCED MATERIALS.

Regarding the same 10th Series CB, Satoshi Holdings decided on the 26th to acquire the 6.8 billion won worth of CB held by the Nakamoto Investment Consortium prior to maturity. The actual acquisition amount is approximately 6.70919 billion won, and the remaining bond balance after the acquisition is 700 million won.

Trading in the company’s shares was suspended following the change in the largest shareholder. The Korea Exchange suspended trading of KOREA ADVANCED MATERIALS’ shares starting on the 27th until further notice to verify whether the new largest shareholder would engage in a backdoor listing and whether the relevant requirements were met. The Nakamoto Investment Consortium must also comply with a one-year mandatory holding period for its shares.

The company’s financial situation remains a concern. Following three consecutive years of operating losses, KOREA ADVANCED MATERIALS posted an operating loss again in the first half of this year. For the public offering of new shares conducted to raise funds, 2,176,400 shares were subscribed—exceeding the planned 1,578,116 shares—resulting in a subscription rate of 137.91%. The new shares are scheduled to be listed on the 11th of next month.

It is also noteworthy that the majority of shareholders are small investors. As of the end of June, 49,103 of the total 49,108 shareholders were small investors, accounting for 99.9% of the total. The shares they hold—46,290,927—represent 87.86% of the total issued shares.

Mr. Kim has previously been involved in the acquisition and sale of management control in listed companies such as KYUNG NAM PHARM.CO.,LTD. and Billions. In this instance, Flake—of which Mr. Kim is the CEO—acquired a stake in KOREA ADVANCED MATERIALS, and the Nakamoto Investment Fund, in which Mr. Kim is an investor, became the largest shareholder, shifting KOREA ADVANCED MATERIALS’ corporate governance structure to be centered around Mr. Kim’s group.

However, KOREA ADVANCED MATERIALS has been suffering from persistent losses and recently conducted a rights offering. Consequently, it remains to be seen whether this change in the largest shareholder will lead to the actual normalization of business operations and improvement of the financial structure, or whether it will result in another management control transaction in the future. In particular, given that there are over 49,000 minority shareholders, attention is focused on how much the new largest shareholder will be able to enhance the company’s value.

Meanwhile, when asked about the background of the change in the largest shareholder, future management direction, and last year’s process involving KOREA ADVANCED MATERIALS’ acquisition of Satoshi Holdings’ convertible bonds and the transfer to Flake, Flake’s representatives avoided providing specific answers. Attempts were made to confirm these details with KOREA ADVANCED MATERIALS as well, but the company could not be reached.