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[Alpha Biz=(Chicago) Reporter Paul Lee] Activist fund KCGI (Kang Sung-bu Fund) sent a letter of shareholders to DBDB HiTek and launched a full-fledged shareholder action.
The KCGI released a shareholder letter on DB HiTek's plan to advance governance on the 1st. KCGI owns 3,128,300 shares of DB HiTek (7.05% stake) through SPC Carofy Holdings.
KCGI explained, "KCGI decided to invest the stake because it believes that DB HiTek's corporate value can be properly evaluated in the market if controlling shareholders and management work together to improve DB HiTek's governance."
KCGI argued that he wanted to meet with DB HiTek executives to discuss ways to improve governance, but DB HiTek did not cooperate. KCGI requested the first shareholder consultation in an official document on April 20. Since then, DB Hi-Tech has postponed the schedule indefinitely, although it presented specific agenda items to meet and discuss in an official document on April 4 and asked for questions. The KCGI asked for a face-to-face consultation schedule one more time in its third official letter on the 19th of last month, but has yet to receive an answer.
KCGI decided that DB HiTek was refusing to talk through shareholder consultations and released the shareholders' letter.
KCGI emphasized that in order to improve governance of DB HiTek, it is necessary to implement △ independent board of directors △ enhancement of management transparency and management efficiency through strengthening internal control △ promotion of shareholder rights.
KCGI said "Despite being a listed company, DB HiTek operates like a controlling shareholder family's private company,". "We should form an independent board of directors for shareholders to have internal control mechanisms and protect shareholder rights." "For this, we demand the resignation of Kim Joon-ki, chairman of the start-up, and responsible management of Kim Nam-ho," KCGI added.
KCGI said "We need to prevent unnecessary outflow of company assets through the introduction of advanced internal control systems." "We need to prepare reasonable procedures for normal financial transactions with affiliated financial companies."
Lastly, KCGI said, "It is necessary to prepare a system to protect the minimum shareholder rights." "It is necessary to guarantee the right to appoint one outside director who is a member of the audit committee, to have that director participate as a member of the board of directors, and to make retirement after purchase of treasury stocks mandatory." .
DB HiTek said, "It's not that we refused to talk with KCGI," and "it just takes time to prepare because the data requested by KCGI is vast and contains information related to trade secrets."
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
