P&I Investment Requests Inspection and Copying of Accounting Books
Stock Price Surges 17% in Trading
[Asia Economy Reporter Lim Jeong-su] A management dispute is emerging at content production company RaemongRaein, which has been thriving thanks to the success of the drama "Jaebeoljip Maknae Adeul" (The Youngest Son of a Conglomerate Family). Two investment associations from P&I Investment, classified as early investors, have requested access to RaemongRaein’s accounting books.
RaemongRaein announced on the 16th that the ‘P&I Munhwa Changjo Investment Association’ and the ‘P&I Munhwa Technology Investment Association’ filed a petition for the right to inspect and copy accounting books at the Seoul Central District Court on the 5th. P&I is known as an early investor that has steadily increased its shareholding since RaemongRaein was listed on KONEX in 2016.
According to the shareholding status disclosed at RaemongRaein’s listing in 2021, the P&I Munhwa Changjo Investment Association holds 2.84%, and the P&I Munhwa Technology Investment Association holds 0.61%, totaling a 3.45% stake. Although the current shareholding ratio is not publicly disclosed, it has been confirmed that it increased to just under 5% by the first quarter of last year.
Shareholders holding more than 3% of shares can request to inspect accounting books. It is rare for minority shareholders with less than 5% ownership to request such access. However, if early investors judge that the management has made decisions contrary to the interests of existing shareholders or that trust in management has declined, even minority shareholders may make such requests.
Many analyses suggest that it is unlikely for this to escalate into a shareholding battle with RaemongRaein’s current major shareholders. This is because P&I’s shareholding ratio is relatively low, and no clear allied shareholders holding large stakes have emerged. As of the end of the third quarter last year, the largest shareholder, WiziWorks Studio, held 20.13%, CEO Kim Dong-rae held 14.07%, and Director Yoon Hee-kyung held 0.32% of shares.
Financial investors (FIs) such as the ‘SBI-Growth Ladder Cotex Activation Fund No. 2’ managed by SBI Investment held large stakes, but most of their shares were sold off as the stock price rose following the success of Jaebeoljip Maknae Adeul. If P&I demands the appointment of an auditor or other proposals at the upcoming shareholders’ meeting and a vote is held, the voting rights of major shareholders and related parties will be limited to 3%, increasing the possibility that P&I’s shareholder proposals will be adopted.
An investment banking (IB) industry insider explained, "Although the declared value of the object for P&I’s accounting book inspection request is only 100 million KRW, usually the declared value is just a simple pretext for inspecting the books," adding, "We need to observe how the situation unfolds to understand the ultimate purpose of the accounting book request."
Meanwhile, on the 17th in the stock market, RaemongRaein’s stock price surged more than 17% as of 9:50 AM, amid concerns over a possible management dispute.
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