[Edaily Marketin, Reporter YunJi Kim ] Content platform company OGQ will hold an extraordinary general meeting of shareholders to proceed with a selective stock cancellation worth approximately 9.4 billion won. This is a procedure to return the 9 billion won in investment funds raised in 2021 for the acquisition of Getty Images Korea; the company will acquire and cancel the shares held by the investment fund.

However, legal disputes surrounding the return of the investment funds are ongoing, and the two parties have yet to reach an agreement on how to handle the approximately 12 billion won in court-ordered debt against OGQ CEO Shin Cheol-ho personally. Consequently, even if the capital reduction proposal passes at this shareholders’ meeting, the dispute over CEO Shin’s personal debt is expected to continue separately from the recovery of the investment funds.

According to industry sources on the 26th, OGQ will hold an extraordinary general meeting of shareholders and a meeting of preferred shareholders in mid-October. The main agenda items for these meetings will include a differential capital reduction and the appointment of directors.

The shares subject to this capital reduction are 112,500 convertible preferred shares held by an investment fund established for the acquisition of Getty Images Korea. OGQ plans to pay approximately 9.4 billion won based on the share value assessed by an external appraisal agency and then cancel those shares. This amount slightly exceeds the 9 billion won originally invested by the fund; once the capital reduction proposal is approved at the shareholders’ meeting and subsequent procedures are completed, the investment fund will recover its investment.

Previously, OGQ had been in conflict with the investment fund over the issue of returning the investment funds. The root of the conflict dates back to the proposed acquisition of Getty Images Korea in 2021. At that time, OGQ raised 9 billion won from the investment fund established for the acquisition of Getty Images Korea. Unlike typical financing for general corporate operations, this was an investment made specifically for the purpose of acquiring a particular company; however, when the acquisition fell through, the issue of recovering the investment funds arose. According to CEO Shin’s side, the acquisition negotiations had progressed to the stage just before signing the contract; however, after news of the planned acquisition was reported in the media, Getty Images headquarters presented additional conditions, which OGQ refused to accept, preventing the deal from being finalized.

After the acquisition fell through, the investment fund negotiated with CEO Shin regarding a plan to return the investment funds but was unable to reach an agreement. Consequently, following a resolution at the 2023 general meeting of fund members, the investment fund filed a lawsuit against CEO Shin personally. The court ruled in favor of the investment fund, determining that the failure of the acquisition had satisfied the contractual conditions for the repayment of the investment funds and that CEO Shin’s repayment obligation—as a party with a vested interest under the investment agreement—remained valid. Subsequently, the investment fund proceeded with enforcement proceedings against CEO Shin’s personal assets; the final judgment against him amounts to approximately 12 billion won, comprising the original investment principal of 9 billion won plus late payment interest and other charges.

This selective capital reduction is being pursued amid ongoing legal disputes over the repayment of investment funds. The capital reduction consent form drafted by the investment fund states that CEO Shin agrees to the selective capital reduction on the condition that he fully repays any debt exceeding the capital reduction amount. Accordingly, OGQ plans to submit a capital reduction proposal worth approximately 9.4 billion won to the general shareholders’ meeting; however, no agreement has been reached between the two parties regarding the specific method of settling the remaining debt.

According to OGQ, CEO Shin proposed to provide approximately 7 billion won worth of his personally held shares as collateral for the remaining debt after the capital reduction payment, but failed to reach an agreement with the investment consortium. Consequently, even if the capital reduction proposal is approved at this general meeting, the issue of how to handle the remaining debt is expected to remain a separate point of contention.