Chorokbaem Group recently announced on the 10th that Chairman Won Young-sik, who was arrested on charges related to stock price manipulation, has resigned, and the group will ban investments in convertible bonds (CB) and bonds with warrants (BW) that caused the recent issues.
On the same day, Kim Se-yeon, Chairman of the Chorokbaem Group Management Committee and CEO of Chorokbaem E&M, held a press conference at the Federation of Korean Industries building in Yeouido, stating, “We sincerely apologize to everyone who has supported Chorokbaem Group,” and added, “Chorokbaem Group will take this incident as a lesson, strengthen internal controls to prevent recurrence, reform the decision-making structure, and focus on normalizing the group’s management.”
At the press conference, CEOs of Chorokbaem Group affiliates, including Chorokbaem Media, Chorokbaem Company, and Chorokbaem E&M, were present.
Kim outlined the specific reform measures of Chorokbaem Group as follows: ▲ Resignation of major shareholder Chairman Won Young-sik ▲ Improvement of governance at the group level ▲ Ban on mezzanine investments such as convertible bonds (CB) and bonds with warrants (BW) ▲ Conducting business activities centered on the purposes stated in the articles of incorporation.
Kim said, “Major shareholder Chairman Won Young-sik will resign from all positions within Chorokbaem Group,” and added, “He will step down without holding any roles or duties related to the company’s business, investment, or financial activities.”
Regarding governance improvement, Kim stated, “We will form a group management committee consisting of CEOs and key executives from each affiliate,” and explained, “The group management committee will serve as a management consultative body to discuss the group’s strategic direction.” Chorokbaem Group explained that this system aims to establish independent management free from the influence of the major shareholder, pursuing growth and synergy maximization across affiliates.
On the highly contentious mezzanine investments, Kim emphasized, “We will no longer proceed with mezzanine investments that pose potential problems, and will only implement them with shareholders’ approval at the general meeting of shareholders when absolutely necessary for management.” He added, “To this end, we plan to convene extraordinary general meetings for each affiliate, and all subsidiaries of Chorokbaem Group will amend their articles of incorporation to make mezzanine investments such as CB, BW, and CPS subject to shareholder resolutions, effectively banning indiscriminate mezzanine investments.”
Kim continued, “Although Chorokbaem Group is facing significant internal and external difficulties due to the major shareholder’s arrest, we promise to normalize the situation as soon as possible and repay our shareholders and supporters,” and added, “Going forward, Chorokbaem Group will focus on generating profits through its core business activities rather than investment activities and will strive to achieve the best possible results.”
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