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[Alpha Biz=(Chicago) Reporter Kim Jisun] The management dispute of private equity fund KCGI, led by DB HiTek and CEO Kang Sung-bu, is heating up.
This is because we have done enough to meet KCGI's requirements and efforts are underway to increase shareholder value. In particular, management disputes are burdensome at a time when performance has deteriorated.
According to legal circles on the 13th, the department for applying for the Bucheon Branch of the Incheon District Court held an interrogation date for applying for an injunction for reading and copying, including accounting books, for DB HiTek (000990), and for permission to read and copy the minutes of the board of directors on the 10th. KCGI's special purpose companies (SPCs), Carofi Holdings and DB HiTek lawyers, participated.
The management dispute began when KCGI secured a stake in DB Hitech. KCGI purchased a 7.05% stake in DB HiTek (3,128,300 common shares) through Carofy Holdings in March and became the second largest shareholder after DB Inc. (12.42%). It is 3.44 percentage points (p) higher than the 3.61 percent stake of Kim Joon-ki, the founder of DB Group.
KCGI has actively engaged in activities to enhance shareholder value by requesting shareholder consultations in April and May and filing an injunction for reading accounting books and copying the minutes of the board of directors on June 13. Despite its outstanding corporate value, DB HiTek is undervalued due to poor management behavior by the owner family and management, calling for a management reform.
DB HiTek shares rose from 36,600 won at the beginning of the year to 75,400 won in early April, shortly after KCGI acquired the stake. Since then, it has been in the mid-50,000 won range due to adjustments.
DB HiTek is in a position to resent KCGI's demands. Most of the data requested by KCGI has been provided except for those that do not exist or are related to trade secrets.
It also held an investor relations meeting (IR) to increase stock value, and met with KCGI to discuss improving governance and enhancing shareholder value. In addition, we are in the process of purchasing treasury stocks that we promised during the material division. However, he drew a line on the resignation of Kim Joon-ki, the chairman of the start-up.
The court also called for additional clarification and submission of the reasons for the KCGI's initial proposal for reading accounting books, saying there were "ambiguities." Carofy Holdings will have to submit additional data by the 31st, and DB HiTek will respond by the 14th of next month.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
