[Governance] Min&Ji Forms Circular Shareholding Structure Through Acquisition of BioEleven Stake

[Asia Economy Reporter Jang Hyowon] IT service provider Min&Ji has formed a circular shareholding structure by acquiring shares of its affiliate Bioeleven in the form of treasury stock exchange. Accordingly, it is analyzed that the group control of Lee Kyung-min, the founder of Min&Ji, has been expanded.

According to the Financial Supervisory Service's electronic disclosure on the 27th, Min&Ji announced that it would acquire 366,891 shares (15.3%) of Bioeleven, an affiliate, the day before. Upon acquisition, Min&Ji's shareholding in Bioeleven will increase to 29.1%, making it the largest shareholder.

Kyungmin Lee, CEO of Min&Ji

Bioeleven is a biotech company that sells the probiotic product 'Deusimone'. It operates businesses including health functional foods, healthcare services, and new drug development.

As of the end of last year, the largest shareholder of Bioeleven was Lee Kyung-min, director and founder of Min&Ji, holding 26.79%. Lee is also the largest shareholder of Min&Ji with a 24.26% stake. Although nominally the largest shareholder of Bioeleven has changed from Lee to Min&Ji, Lee's control remains unchanged.

The original owner of the Bioeleven shares acquired by Min&Ji this time is 'Hecto', an affiliate of Min&Ji. Hecto is a corporation within the Min&Ji group that provides management support services such as HR, legal affairs, and public relations. The largest shareholder of Hecto is Settlebank, holding 70% of the shares. The remaining 30% is owned by Min&Ji. Settlebank is also a subsidiary of Min&Ji.

Min&Ji acquired 15.3% of Bioeleven shares by paying 816,815 treasury shares as the acquisition price. The current value is approximately 15.5 billion KRW. This accounts for 6% of the total Min&Ji shares.

In summary, the original ownership structure was that Min&Ji held 13.8% of Bioeleven shares, and Hecto, a subsidiary of Settlebank which is a subsidiary of Min&Ji, held 15.3% of Bioeleven shares. Min&Ji transferred treasury shares to Hecto and acquired Bioeleven shares, thereby securing a total of 29.1%.

Thus, Min&Ji has formed a circular shareholding structure of 'Min&Ji → Settlebank → Hecto → Min&Ji'. Under the Commercial Act, subsidiaries cannot own shares of their parent company. If shares are acquired through stock exchange, they must be sold within six months.

However, since Hecto is an affiliate in which Min&Ji does not directly hold more than 50% of shares, it can hold shares of Min&Ji, according to the company. Therefore, the voting rights of Min&Ji's treasury shares will also be activated, and the control of the largest shareholder is expected to expand.

A Min&Ji official said, "This transaction aims to strengthen Min&Ji's control over Bioeleven," adding, "We expect synergy from the combination of biotech company Bioeleven and Min&Ji's IT technology."