Aibit Faces Another Management Dispute... "Minority Shareholder Proxy for Private Gain" vs "Damage to Shareholder Value"

[Asia Economy Reporter Jang Hyowon] AIBIT, a KOSDAQ-listed company currently under trading suspension, has once again become embroiled in a management rights dispute. Minority shareholders have requested the convening of an extraordinary general meeting, but the company claims that the minority shareholders' representatives are acting with the purpose of personal gain. On the other hand, the minority shareholders' representatives counter that the management's mistakes have damaged shareholder value.

According to the Financial Supervisory Service's electronic disclosure on the 26th, AIBIT resolved to convene an extraordinary general meeting on the 24th. This was in response to a request from minority shareholders including Jeong Gi-hwan and 38 others.

The main agenda items include the dismissal of the current internal and external directors and auditors of AIBIT, and the appointment of four new directors and auditors. The minority shareholders stated, "Due to the current management, the company has suffered losses and shareholder value has been damaged," and added, "We will reorganize the company's management to contribute to the company's development, shareholder interests, and the national economy."

The dismissal proposal also includes two directors who were appointed through shareholder proposals at the extraordinary general meeting held on the 5th of last month. Previously, AIBIT's management had been engaged in a management rights dispute with the largest shareholder, Han Seung-pyo, for the past three months. However, this was resolved amicably, and two directors were appointed through shareholder proposals.

The company stated in a notice on its website, "The current management and the largest shareholder, Mr. Han, have agreed to maintain a cooperative working relationship, each making their best efforts to resume trading of the company."

Despite having resolved a previous management rights dispute well, other minority shareholders have filed a new management rights lawsuit. In response, AIBIT claims that this management rights dispute lawsuit is aimed at the personal gain of the lawsuit representatives rather than the resumption of trading.

The minority shareholders who requested this extraordinary general meeting have appointed K Law Firm as their legal representative. It is known that the minority shareholders have filed three additional management rights dispute lawsuits through K Law Firm besides the request to convene the extraordinary general meeting.

An AIBIT official stated, "Attorney A of K Law Firm, who is acting as the legal representative in this lawsuit, previously unjustly demanded that our company invest 10 billion KRW in another KOSDAQ-listed company designated by himself." The official also revealed that Attorney A has been reported to the prosecution regarding this matter.

On the other hand, Attorney A insists that all of AIBIT's claims are false. Attorney A said, "I was only representing a client who sought to claim penalty damages because AIBIT failed to fulfill a 10 billion KRW investment contract with another listed company," and added, "What is important now is the reason why the minority shareholders requested the convening of the extraordinary general meeting."

Meanwhile, the CEO of the KOSDAQ-listed company that Attorney A claims to represent stated, "Due to the company's financial situation at the time, investment funds were needed, but I never requested Attorney A to demand a 10 billion KRW investment from AIBIT," and added, "Attorney A is currently demanding an unjust 4 billion KRW success fee for benefits that our company has not received, and we are in litigation over this."

Meanwhile, AIBIT plans to hold the extraordinary general meeting, which includes the agenda for the dismissal of the current management and the appointment of new management, on January 7, 2021, at the aT Center in Seoul.