[Asia Economy Reporter Jang Hyowon] The founder of TLI, a KOSDAQ-listed company embroiled in a management rights dispute, and the shareholder coalition have entered a competition to secure voting rights to win the upcoming shareholders' meeting.
According to the Financial Supervisory Service's electronic disclosure on the 24th, the shareholder coalition of TLI, called the "Shareholder Coalition for Turnaround," and former CEO Kim Dalsu will begin soliciting proxy voting rights starting from the 25th.
On June 25th, TLI resolved to hold an extraordinary shareholders' meeting on July 7th at the request of both the shareholder coalition and former CEO Kim. The agenda includes the appointment of directors Kim Dalsu, Ko Youngsang, Cho Sangjun (non-registered director), and Park Woojeon. Kim and Park are nominees proposed by Kim’s side, while Ko and Cho are proposed by the shareholder coalition.
According to TLI’s articles of incorporation, the total number of directors is five, with two vacancies currently. Only two directors can be appointed at this shareholders' meeting to fill the vacancies.
Cho, the representative of the shareholder coalition, first appeared as a TLI shareholder in November last year. Having held TLI shares previously, he purchased an additional 7,109 shares on the market at that time, bringing his total holdings to 500,000 shares (5.06%). Subsequently, Cho acquired an additional 25,555 shares and was newly appointed as a non-registered director of TLI in February. At that time, instead of engaging in a management rights dispute with minority shareholders, TLI decided to jointly pursue new business ventures.
However, the situation drastically changed at the regular shareholders' meeting held at the end of March. The agenda to reappoint former CEO Kim, whose term had expired, was rejected, and Vice President Hong Se-kyung was appointed as the new CEO. It is analyzed that minority shareholders, including Cho, cast opposing votes.
After dismissing former CEO Kim, on April 6th, Cho formed the "Coalition for Turnaround" together with 13 major shareholders and contributed most of his shares. As a result, the coalition became the largest shareholder with a 15.37% stake in TLI. Former CEO Kim was pushed to second-largest shareholder with 10.87%.
It seemed the company would fall to the coalition, but former CEO Kim purchased additional TLI shares on the market. He borrowed 5 billion KRW from Horizon Capital using his shares as collateral to buy more stock. Even when the stock price surged to a 52-week high of around 12,000 KRW, he continued acquiring shares on the market.
Additionally, the foundation 'Seokwoo,' which holds TLI shares, was added as a related party. Seokwoo’s Chairman Kim Gwansu is reportedly related to former CEO Kim by family ties. Seokwoo has been disclosed as holding TLI shares since February 2017, but this is the first time it has been included as a related party of former CEO Kim. The company stated, "We do not know why Seokwoo was only now included as a related party." Ultimately, as of the 7th, former CEO Kim holds 15.8%, reclaiming the position of largest shareholder of TLI.
However, the difference in shareholding between former CEO Kim and the shareholder coalition is only 0.43%, so the outcome of the upcoming shareholders' meeting is expected to hinge on which side secures more voting rights from other shareholders.
Former CEO Kim stated, "I have grown together with the company from its inception until now, but lost my director position at the regular shareholders' meeting in March," adding, "As many shareholders know, since this is a company we have grown with, I purchased additional shares using my personal shares as collateral out of attachment to the company." He continued, "I will return to my position and strive to normalize management and achieve profitability so that TLI can develop and progress further, rewarding the shareholders."
On the other hand, the shareholder coalition said, "During the founder’s (former CEO Kim’s) management, the company’s sales sharply declined, there were no sales from new LED-related businesses, and no clear vision was presented, putting the company at risk of delisting after four consecutive years of losses," adding, "The current CEO and employees are on the verge of signing a system semiconductor design service contract with a major domestic conglomerate to normalize management."
They further stated, "To maximize shareholder value, we will pursue ▲diversification of sales clients ▲expansion of research and development ▲restructuring of non-core businesses such as the Jeju training center ▲a bonus issue ▲investment in growth businesses using funds from the sale of the company building ▲and company promotion and investor relations activities."
Meanwhile, TLI is a company primarily engaged in system semiconductor design, including timing controllers (Timing Controller), a core component of LCD panels, and LCD driver ICs. Over 90% of its sales come from LG Display. It possesses one of the few NAND flash memory controller design technologies in the world.
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