CI Tech and Management Dispute... Who Is Lee Hak-young, CEO of Hunter House?

CI Tech CEO Lee Hak-young Faces Hostile M&A Forces
Lee Hak-young's Side Claims "CI Tech Violates Disclosure Obligations, Disrupts Market Order"
E&S Three, AT Semicon, Leaders Technology Investment Gain Profits in M&A and Management Disputes

Lee Hak-young, CEO of Hunter House, which is engaged in a management rights dispute with kiosk specialist company CI Tech, has been found to have made profits through stocks while moving between listed companies experiencing merger and acquisition (M&A) issues or management rights disputes.

According to the financial investment industry, CI Tech is currently in a management rights dispute with Lee Hak-young, CEO of Hunter House. Lee, the second-largest shareholder, is pressuring CI Tech, accusing it of violating disclosure obligations and disrupting market order. During the transition from the initial major shareholder Withwin to the current major shareholder CNC Technology, a large volume of counter-trades occurred. However, it is claimed that the interested parties deliberately concealed this and falsely maintained control.

CI Tech defines Lee Hak-young as a hostile M&A force. As of the 25th, Lee holds 11.25% of CI Tech shares, including those of the related party Hunter House. The largest shareholder group of CI Tech, including CNC Technology and five others, holds 19.38%.

Lee, who is in opposition to CI Tech, has previously been involved with several listed companies such as EN3 (now EN Plus), AT Semicon, and Leaders Technology Investment. All these companies have experienced M&A or management rights disputes to varying degrees.

In December 2015, Limtech became the largest shareholder of EN3. After Limtech took over as the largest shareholder, Lee served as an inside director of EN3, CEO of EN3 Global, and inside director of Limtech. In 2016, during a management rights dispute, Lee, who was then vice president, was dismissed but later reinstated along with CEO Jung Young-woo. At that time, there were suspicions that the subsidiary EN3 Global purchased real estate from the largest shareholder at an inflated price.

Lee also made profits from EN3 stocks. In March 2017, he held 0.57% (102,000 shares) of EN3. In May of the same year, he sold over 100,000 shares at 3,200 KRW per share, and the following month sold the remaining 2,000 shares at 4,439 KRW per share.

In 2021, Lee reappeared at Rix Solution (now Gwangmu). In November of the same year, Gwangmu’s largest shareholder changed to Strata Association. Lee was a major investor in Strata Association, holding 13.84%. Strata Association invested 6.5 billion KRW in Gwangmu’s paid-in capital increase, acquiring 13.36% (14 million shares) at 464 KRW per share.

During this period, Gwangmu conducted another paid-in capital increase in June, changing the largest shareholders to Atlas Palcheon and two others. In this situation, Strata Investment Association began reducing its shares immediately after the lock-up period ended. Although the exact sale price is unclear, the on-market sale price was 3,262 KRW per share. Based on this, Strata Association, which had invested at 2,320 KRW per share (based on par value consolidation), sold all shares for about 9.1 billion KRW.

Lee also appeared in AT Semicon. In 2021, AT Semicon acquired the shares of Leaders Asset Holdings, the largest shareholder of Uni Holdings and Leaders Technology Investment, for 37.4 billion KRW. Among these, Lee acquired 2.44% (2,363,520 shares) at 1,450 KRW per share. The external appraisal agency’s benchmark price was 915 KRW per share.

Lee’s activities did not stop there. On February 28 last year, Talion, wholly owned by Lee Hak-young as CEO and holding 100% of shares, disclosed that it held 5.03% (1,557,931 shares) of AT Semicon. The average price per share was in the 1,300 KRW range. Subsequently, Lee personally began purchasing shares. After converting convertible bonds into stocks in April of the same year, by December, through convertible bond conversions and on- and off-market purchases, he held 7.15% (5,167,345 shares). The acquisition cost of bonds and stocks totaled 6 billion KRW, with an average price per share of about 1,167 KRW. He sold 5 million shares on January 31 through off-market sales at 1,300 KRW per share. Currently, AT Semicon is under trading suspension.

Meanwhile, Lee Hak-young refuted CI Tech CEO Kim Dae-young’s characterization of him as a corporate raider. In a “small shareholder notification” last month, he stated, “If hostile M&A had been falsely fabricated as a means to achieve the impure purpose of market price creation, I would have sold at the highest price and realized huge profits,” adding, “Accusing the active management participation intentions of minority shareholders as hostile M&A with impure motives is an act of ignoring the true owners of the company, the minority shareholders.”