[Edaily Reporter KIM SAE-MI ] Kim Seong-yeon, a director at Genosco and the largest shareholder of OSCOTEC Inc.(039200), has promised that even if he disposes of his shares in the future ahead of the extraordinary general meeting of shareholders scheduled for the 30th, he will not seek or accept terms more favorable than those offered to other shareholders.
In her “Second Letter to Shareholders,” released on the 15th, Director Kim stated, “Even if I were to dispose of my shares in the future, I will not demand or accept terms more favorable than those offered to other shareholders.”
She added, “Even if a transfer of management control is discussed, it must be done in a way that fairly protects the interests of all shareholders,” reaffirming her commitment to protecting the interests of minority shareholders during the process of transferring management control and attracting outside investment.
He emphasized that disputes among shareholders at OSCOTEC Inc. must not be allowed to recur. Director Kim pointed out, “If a transfer of management control or the attraction of large-scale investment is carried out in a manner that benefits only a select few, mistrust and disputes will resurface, and the damage will fall on the company and all shareholders.”
He also made it clear that he does not oppose attracting external investment per se. While Director Kim actively supports OSCOTEC Inc.’s ongoing research and development and fundraising efforts, he outlined three principles: △ investment for the company’s growth; △ prevention of damage to existing shareholder value; and △ sufficient disclosure and fair verification of investment terms. He viewed the specific form and structure of the investment as a matter to be determined by the investors and the board of directors, taking into account the interests of all shareholders.
He expressed caution regarding the current management’s policy of attracting strategic investors (SIs). Referring to a statement made by OSCOTEC Inc. CEO Yoon Tae-young in a media interview last October—in which he announced plans to attract an SI that would provide a friendly stake—Director Kim argued, “If the investment is made on the condition of supporting management control, the burden of the resulting dilution of shares will ultimately fall on you, the shareholders.”
He went on to emphasize that the expansion of the total number of authorized shares and the issuance of new shares through third-party allotment should be discussed only after the composition of the board of directors is finalized following this extraordinary general meeting. His position is that the purpose of the funds and the terms of the issuance must be fully disclosed to shareholders in advance to allow them the opportunity to make an informed decision.
This shareholder letter was issued amid an escalating conflict over management control at OSCOTEC Inc. Director Kim became the largest shareholder last July after inheriting the shares of his late father, Kim Jeong-geun, the founder of OSCOTEC Inc. Since then, he has entered into a joint voting agreement with the second-largest shareholder and has been pushing for a restructuring of the corporate governance. On the other hand, some members of the existing board of directors expressed concern that the largest shareholder’s entry onto the board could lead to a conflict of interest during the process of making Genosco a wholly-owned subsidiary.
A showdown is expected at the extraordinary general meeting of shareholders on the 30th over the deletion of the articles of incorporation clause regarding the supermajority voting system and the appointment of three new directors. The supermajority voting system is a mechanism that applies a higher approval threshold for specific agenda items than that required for a general special resolution; the relevant clause in OSCOTEC Inc.’s articles of incorporation was ruled invalid by a court of first instance last November. The legal dispute continues as the company has filed an appeal.
Director Kim has stated that he intends to fill the three vacant seats on the board at this extraordinary general meeting to strengthen the board’s expertise and accountability. He reiterated his promise that, while he will take responsibility for decision-making as a non-executive director, he will not participate in the deliberation or voting on agenda items related to the valuation of Genosco or its conversion into a wholly-owned subsidiary, where concerns about conflicts of interest have been raised. Director Kim emphasized, “I promise this based on principle, not on conditions.”
