Kang Jeong-hoon, CEO of Ilya, Sued Over Failed Sale... Dual Hardships Amid Small Shareholders' Backlash

[Asia Economy Reporter Jang Hyowon] It has been confirmed that Kang Jeonghoon, CEO of Kosdaq-listed company Ilya, whose sale fell through, has been sued by the acquiring party. Additionally, as the stock price declined, minority shareholders have sent shareholder proposals in protest, indicating that the company is facing double difficulties.

On the 20th, IP Parts, which had agreed to acquire 3,397,931 shares (10.18%) held by Ilya Chairman Kang Jaewoo and his wife, announced that on the 16th, they filed a complaint against Kang Jeonghoon, CEO of Ilya, at Yongsan Police Station in Seoul on charges of fraud and violation of the Capital Markets Act.

Night view of Incheon headquarters.

IP Parts claimed, “CEO Kang Jeonghoon and Chairman Kang Jaewoo conspired to commit fraud to forfeit the deposit of 2 billion KRW despite having no intention to sell the company from the beginning.”

CEO Kang Jeonghoon is the largest shareholder of Ilya, holding 3,329,853 shares (9.98%). Previously, on November 14 last year, Kang Jaewoo, CEO Kang’s father and Chairman of Ilya, signed a contract to transfer his shares and those of his wife Han Seungja, totaling 10.18%, to IP Parts for 6 billion KRW. IP Parts paid a deposit of 2 billion KRW on the day of the contract.

This contract included the transfer of management rights, but the transaction of shares held by the largest shareholder, CEO Kang Jeonghoon, was excluded. This is because Kang’s shares were placed under a lock-up until 2025 when Ilya’s sales sharply declined due to LG Electronics’ withdrawal from the smartphone business in 2020, resulting in a trading halt.

However, according to IP Parts, CEO Kang demanded an additional 7 billion KRW on the condition that he would later take over his shares, and also requested 6 billion KRW to release the payment guarantees he had provided to the company. They also disclosed messages sent directly by Kang to IP Parts regarding this matter.

An IP Parts official stated, “CEO Kang continuously made demands not specified in the contract, delaying the contract’s conclusion, and unilaterally terminated the contract one day before the scheduled payment date, forfeiting the deposit. We plan to take all necessary civil and criminal legal actions regarding this.”

In response, Kang Jeonghoon, CEO of Ilya, denied the claims, stating, “I never demanded the acquisition of locked-up shares.” However, when asked about the messenger messages in which Kang allegedly requested the acquisition of shares from IP Parts, he did not respond.

Furthermore, as the sale of Ilya fell through and expectations for business normalization vanished, causing the stock price to plummet, minority shareholders also rose up. The Minority Shareholders’ Coalition (tentative name), holding more than 3% of Ilya’s shares, proposed the appointment of new directors on the 15th, stating, “Due to CEO Kang Jeonghoon’s reckless and poor management, minority shareholders have suffered enormous financial losses.” In response, Ilya stated, “Shareholder proposals for the regular general meeting must be submitted at least six weeks before the previous regular general meeting, and since that period has already passed, we cannot accept the proposal.”