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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] South Korea’s National Pension Service (NPS) has raised concerns over potential shareholder value erosion stemming from Hanwha Aerospace’s controversial capital increase—dubbed the largest in domestic history—and is set to review the case through its stewardship committee.
According to industry sources on Monday, the NPS’s Stewardship Responsibility Committee plans to convene a meeting in the near future to determine whether Hanwha Aerospace has violated any key governance standards. The exact schedule for the meeting is still being finalized.
The review will assess whether the rights offering poses a corporate governance risk by damaging corporate value or infringing on shareholder rights. If the committee concludes that Hanwha Aerospace has breached its “priority engagement” criteria, the company may be designated as a target for non-public engagement.
Such a designation would shift NPS’s shareholding purpose from passive to active investment, allowing the pension fund to initiate behind-the-scenes communications such as sending private letters or holding confidential meetings to verify facts and push for corrective actions.
NPS applies its stewardship principles to domestic companies in which it holds more than 5% ownership or those that represent over 1% of its portfolio. As of the end of last year, NPS held a 7.43% stake in Hanwha Aerospace, making it one of the firm’s major shareholders.
On March 20, Hanwha Aerospace announced a rights offering worth 3.6 trillion KRW—the largest ever in Korea’s capital market history—prompting concerns over share dilution and a sharp decline in stock price.
Financial regulators have also intervened. On March 27, the Financial Supervisory Service (FSS) ordered Hanwha Aerospace to revise its securities registration statement, citing insufficient justification for the capital increase and a lack of communication with shareholders. In response, Hanwha Aerospace reduced the planned issuance to 2.3 trillion KRW in a revised filing on April 8.
Despite the revision, the FSS demanded a second correction on April 17, signaling a hardline stance with its new “unlimited revision” policy. The regulator emphasized that further legal review of the fundraising plan is needed.
Separately, the Korea Exchange issued a notice on April 9 warning that Hanwha Aerospace could be designated as a company with inadequate disclosure practices.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
