Hanp "Responding According to Legal Procedures for Shareholder Proposals"

[Asia Economy Reporter Park Hyungsoo] According to the Financial Supervisory Service's electronic disclosure system on the 19th, small shareholders of Hanp have filed a petition for injunction to propose an agenda at the Jeju District Court.

Six shareholders, including Son Ho-kyung, demanded that the agenda to appoint three inside directors and one outside director at the Hanp regular shareholders' meeting scheduled for the 28th be put on the table.

Hanp management stated regarding the shareholders' proposal, "If the entire board of directors is replaced at the shareholders' meeting held after being designated as a management item, it could be grounds for a substantive review for delisting."

Hanp management estimated that the six shareholders who filed the petition for injunction hold about 2-3% of the shares. SL Innovation, Hanp's largest shareholder, holds 15.34% (8,102,017 shares).

A Hanp official explained, "We see the shareholders' proposal as a strategy targeting Jeju CC, which was acquired in December last year," adding, "They are trying to claim early redemption of convertible bonds (CB) worth 12 billion KRW to acquire the special purpose company (SPC) that owns Jeju CC instead."

Previously, Hanp issued CBs to Wells Investment Advisory and others in 2018 and 2019. A Hanp official said, "After completing the acquisition of Jeju CC last December using retained earnings, we proceeded with a paid-in capital increase to facilitate early redemption of the convertible bonds," adding, "However, difficulties arose in attracting investment due to the filing of an injunction to prohibit new share issuance."

The court dismissed the injunction to prohibit new share issuance. According to KOSDAQ listing regulations, companies designated as management items may be subject to a substantive review for delisting if the largest shareholder or CEO changes. The regular shareholders' meeting is held after the designation as a management item. Hanp management judged that if the entire board of directors is replaced rather than just some members, it could be grounds for a substantive review for delisting.

A Hanp official said, "After acquiring Jeju CC, we intended to resell it to secure capital for the long-cherished project of building a hydrogen fuel cell power plant," adding, "The successful acquisition ironically led to a shortage of Hanp's retained earnings, becoming a poison." He also added, "We are exploring various measures to overcome the current situation."