[At a Crossroads: Listed Companies] New Power Plasma Cannot Sell Shares of Hanguk Fiber

[Asia Economy Reporter Jang Hyowon] The court has issued an injunction prohibiting the disposal of shares of Hanguk Fiber, which were acquired last year by New Power Plasma, a semiconductor equipment parts manufacturer. This is because a lawsuit to cancel the fraudulent conveyance related to the share transaction has been filed.

According to the industry on the 15th, the court accepted the provisional injunction request to prohibit the disposal of Hanguk Fiber shares acquired by New Power Plasma last year in April. As of the end of the first half of this year, Hanguk Fiber accounts for 52% of New Power Plasma's total assets.

Previously, in December last year, New Power Plasma acquired 772,585 shares (65.81%) of Hanguk Fiber, which operates businesses such as aircraft parts, railway vehicle interiors, and pipes, for 58 billion KRW. It is analyzed that 47 billion KRW was paid for the share acquisition and 11 billion KRW for the convertible bonds (CB) acquisition. The transaction counterparties were the largest shareholders of Hanguk Fiber at the time and private equity funds.

The party who filed the injunction request regarding these shares are other major shareholders of Hanguk Fiber. They filed a lawsuit to cancel the fraudulent conveyance against New Power Plasma and simultaneously proceeded with the injunction request, which the court accepted.

They claim that the previous largest shareholder of Hanguk Fiber committed fraudulent conveyance by selling Hanguk Fiber shares at a low price without repaying debts. The core of this lawsuit is that New Power Plasma, knowing this situation, participated in the fraudulent conveyance and therefore the share purchase agreement of Hanguk Fiber should be canceled.

In fact, the consideration for the transfer of Hanguk Fiber shares to New Power Plasma last year was 47.1 billion KRW, while the net asset value was 64.7 billion KRW. Contrary to the usual practice of paying a premium when acquiring controlling shares, the acquisition was made at a cheaper price. As a result, negative goodwill of 17.6 billion KRW occurred.

Previously, in May last year, Samwon Jingong, acquired by New Power Plasma, had a net asset value of 1.2 billion KRW, but 6 billion KRW was invested, resulting in goodwill of 4.8 billion KRW.

Furthermore, New Power Plasma has not disclosed the fact that a provisional injunction prohibiting the sale of Hanguk Fiber shares is in place. Even in April, when the injunction was accepted, and in the first half report, the injunction was not disclosed.

An official from the financial authorities said, “Although it is not a listed stock and there is no obligation for timely disclosure of injunction decisions, since it concerns a major asset that accounts for a large portion of the company, it is recommended to include it in semi-annual reports, etc. In the case of this company, it is necessary to judge whether it significantly affects business operations.”

Regarding this, the company stated, “The Hanguk Fiber injunction case is related to the fraudulent conveyance cancellation lawsuit, so it was indicated as ‘fraudulent conveyance cancellation lawsuit, etc.’ in the semi-annual report.”