[Edaily Reporter Kim Kyung-eun ] On the 23rd, the Korea Corporate Governance Forum welcomed the decision by Solidim, a subsidiary of SK hynix(000660), to suspend its plans for an initial public offering (IPO), while urging the company to disclose the board of directors’ official resolution and the decision-making process. The forum argued that while it is positive that concerns regarding conflicts of interest between the controlling shareholder and minority shareholders have been resolved, it must be clearly disclosed whether the decision to suspend the IPO was made following deliberation and a vote by the board of directors.

The Governance Forum issued a statement that day, saying, “The suspension of Solidim’s pre-IPO equity investment and initial public offering (IPO) is a natural decision to resolve the conflict of interest between SK Group Chairman Chey Tae-won and minority shareholders,” and added, “We welcome this decision.”

Earlier that day, SK hynix announced in a regulatory filing that it had decided to suspend consideration of Solidym’s pre-IPO and IPO. SK hynix explained, “Solidym had been reviewing various financing options to expand production capacity and strengthen competitiveness, but decided to suspend consideration of the pre-IPO and IPO after comprehensively considering capital market conditions and other factors.”

The Governance Forum emphasized the transparency of the decision-making process rather than the decision to suspend the listing itself. The Forum pointed out, “We question whether this decision resulted from the board of directors deliberating on the matter and passing it by a vote, or whether it was simply a public announcement of a decision made by the controlling shareholder or management.”

It further emphasized, “Ko Seung-beom, Chairman of the SK hynix Board of Directors, should convene a board meeting to review the Solidim listing proposal—which could have a devastating impact on the stock price and corporate valuation—from various perspectives,” adding, “It is necessary to disclose the results and communicate them to shareholders.”

In particular, given that there are multiple options for the subsidiary’s growth strategy and capital allocation, the forum argued that the board must thoroughly review the pros and cons of a pre-IPO and an IPO and disclose the rationale behind its final decision. It explained that since directors’ fiduciary duties have been extended to shareholders, the board has a responsibility to fairly protect the interests of all shareholders.

The Governance Forum also reaffirmed its existing position that it is more beneficial for shareholders for SK hynix to retain 100% ownership of Solidim rather than selling its stake to external parties. While the need to secure large-scale investment funds is cited as a justification for Solidim’s IPO, the Forum argues that, given SK hynix’s cash-generating capacity, external fundraising is not inevitable.

Based on estimates from domestic securities firms, the Forum projected that SK hynix’s cash reserves would increase from 132 trillion won at the end of this year to 456 trillion won by the end of next year. It also estimated that free cash flow would reach 167 trillion won in 2026 and 326 trillion won in 2027.

The forum added, “Even if Solidigm needs tens of trillions of won for capital expenditures, cash-rich SK hynix can simply invest directly through its AI Company,” noting, “From the perspective of SK hynix shareholders, it is more advantageous to retain 100% ownership of Solidigm rather than sell their stake.”