Asia Economy Secures 5% Stake in Employee Stock Ownership Association... Becomes Major Shareholder

Majority Shareholder's Free Contribution... First in Media Company

Photo by Asia Economy DB

Asia Economy contributed funds to its employee stock ownership association to acquire approximately 5% of the shares. This measure follows the decision of the largest shareholder to enhance the sense of ownership among members and establish a foundation for management participation, thereby strengthening the core journalism function of the media company. It is the first case of a media company based on majority shareholder ownership.

Asia Economy announced on the 9th that it unconditionally contributed about 2.2 billion KRW to the employee stock ownership association, which then purchased shares to become a major shareholder. The association used the contributed funds to buy 1,745,204 shares, representing 5% of the remaining shares held by the former largest shareholder, KX Innovation, through an over-the-counter transaction. As a result, including the 0.07% stake it already held, the Asia Economy employee stock ownership association now holds a total of 5.07% of the shares, becoming a major shareholder of the company.

Since Chairman Hyun Sang-soon announced last year the plan for employee management participation through the acquisition of shares by the employee stock ownership association, Asia Economy has formed a task force (TF) involving both labor and management for over a year to discuss specific methodologies. Chairman Hyun explained the background of this fund contribution by stating, "The sustainable growth of a media company requires not only external expansion but also the establishment of healthy governance and a system where labor and management grow together." This means establishing a governance structure suitable for a public media company that allows employees to participate in management in a healthy way, while also putting in place mechanisms to protect the media company from external commercial capital.

Regarding the significance of the company's decision to contribute funds, Lee Hyun-woo, head of the employee stock ownership association, said, "With the largest shareholder fulfilling their promise, a very concrete and realistic mechanism for employee management participation has been established, raising great expectations among members," and added, "It is evaluated as a motivation and performance reward that goes beyond wage increases and other treatment improvements."

This event also signifies the complete resolution of the management dispute that arose in January-February 2022. When Keystone Private Equity (Keystone PE) became the largest shareholder of Asia Economy in July 2021, KX Innovation launched a dispute in January last year by deploying the then CEO and two outside directors to nullify Keystone PE’s status as the largest shareholder and its management rights. After about three months of behind-the-scenes negotiations, the dispute was settled, and the ownership and leadership system was established. KX Innovation had maintained its position as the second-largest shareholder but completely severed ties with Asia Economy by disposing of all its shares, including the 5% stake transferred to the employee stock ownership association and the previously held 14.48% stake, during this transaction process.