[Edaily Reporter Kim Hyung-wook ] SNT Holdings, the largest shareholder currently in a dispute with SMEC CO.,LTD’s current management over control of the company, has proposed support for a capital increase while reiterating the need for management and financial oversight through participation on the board of directors. The company also stated that if no substantial improvement in relations is achieved, it may comprehensively reevaluate the fundamental direction of its shareholder relations.

SNT Holdings announced on the 7th that it had delivered a “Statement on the Background of the Investment in SMEC CO.,LTD and Future Shareholder Relations” to SMEC CO.,LTD shareholders. The full text of the statement was also posted on the websites of SNT Holdings and SNT MOTIV.

This statement follows up on SNT Holdings’ proposal last month to meet with the current management and major shareholders. On the 22nd of last month, SNT Holdings sent a certified letter to SMEC CO.,LTD Chairman Choi Young-seop, CEO Kwon Oh-hyuk, other members of the current management, related parties, the employee stock ownership association, and ManhoRope&Wire, requesting a meeting on the 29th of the same month to discuss mid- to long-term growth strategies, investment and financing, and financial stability. However, according to SNT Holdings, although some communication has taken place, a specific schedule for the discussions has not yet been finalized.

The SNT Group has been seeking to participate in SMEC CO.,LTD’s management since becoming its largest shareholder during the fundraising process for SMEC CO.,LTD’s acquisition of HYUNDAI WIA’s machine tool business. At the time of the meeting proposal last month, the combined stake held by SNT Holdings and SNT MOTIV stood at 28.15%, exceeding the approximately 20% held by the current management, related parties, the employee stock ownership association, and ManhoRope&Wire—all of whom are considered management-friendly shareholders.

SMEC CO.,LTD’s current management defended its control by appointing management-nominated directors with the support of general shareholders at the shareholders’ meeting in March of this year. However, the standoff between the two sides has persisted as the SNT Group has continued to take legal action to secure additional shares and gain access to and copies of the company’s accounting records.

In a statement released that day, SNT Holdings asserted that its initial investment was not intended as a hostile takeover and that, even after becoming the largest shareholder, it had prioritized respecting the existing management and enhancing corporate value through cooperation. It also stated that, following the court’s preliminary injunction regarding the inspection and copying of accounting records, no actual inspection has taken place.

The company proposed participating in a capital increase to enable SMEC CO.,LTD to secure growth funds without relying on additional borrowing, as well as measures to ensure employment and organizational stability. At the same time, it emphasized the need for a system of management oversight and board participation that would allow the largest shareholder to supervise key management and financial matters. This is interpreted as a call for consultation with the current management, combining a proposal to support growth funding with a proposal for management participation.

An SNT Holdings official stated, “If the uncertainties regarding management and finances are not resolved and relations do not improve, we may comprehensively reevaluate the fundamental direction of our future shareholder relations.”