Kimex Files Injunction to Postpone Board Member Appointment Proposal
ET Holdings, Which Signed Stock Acquisition Contract, Faces 'Complete Capital Impairment'
The management rights dispute of Mediazen, a company listed on KOSDAQ, appears to be intensifying.
According to the Financial Supervisory Service's electronic disclosure on the 7th, on the 29th of last month, 'Kimax' filed a provisional injunction to propose an agenda to Mediazen. The request is to include the appointment of one inside director and one auditor recommended by themselves at the regular shareholders' meeting scheduled for the 22nd.
Kimax is a company engaged in the manufacture of directional oil. Since February 2022, it has been purchasing Mediazen shares on the market and currently holds 925,000 shares (19.74%). Including shares held by related parties, it has secured a total stake of 27.19%.
As a result, on the 4th, Mediazen's largest shareholders changed to Kimax and two others. The previous largest shareholder, founder CEO Ko Hoon, currently holds 26.2% including shares of related parties.
Notably, the stake of Altus Investment Advisory, which declared management participation in Mediazen alongside Kimax, is also remarkable. Altus Investment Advisory first disclosed holding Mediazen shares in October 2020. At that time, it reported the shares as a simple investment, but from the end of 2020, it changed the purpose to management participation and continued to increase its stake.
Altus Investment Advisory has entered into stock purchase agreements with Kimax and several other shareholders. The shares grouped around Altus Investment Advisory total 44.24%, far exceeding the stake held by CEO Ko Hoon's side.
In particular, among the shares grouped around Altus Investment Advisory, 1,821,869 shares (38.89%) were transferred in January to a corporation called 'ET Holdings.' ET Holdings, together with Jidam Investment Association and Dasom Investment Association, signed stock and management rights transfer contracts with Altus Investment Advisory. Although Altus currently does not hold management rights of Mediazen, it entered into related contracts.
The total transfer amount is 35.1 billion KRW, approximately 19,267 KRW per share. Considering that Mediazen's stock price on the contract day was 17,990 KRW, the sale was made with almost no premium. Since then, the stock price has continued to decline, standing at around 12,000 KRW as of the previous day.
The market is focusing on whether this contract will be finalized. The contract termination date between Altus Investment Advisory, Kimax, and ET Holdings is the 31st, after Mediazen's shareholders' meeting. It is analyzed that the agenda requested by Kimax at the shareholders' meeting and securing the positions of inside director and auditor will be a significant issue.
Meanwhile, concerns have been raised about ET Holdings' financial capability. ET Holdings was established in 2018 with a capital of 30 million KRW. According to disclosures, its total assets are 570,000 KRW, and liabilities are 15.52 million KRW, indicating a complete capital erosion. To raise 35.1 billion KRW, it must procure external funds. Nevertheless, ET Holdings disclosed the acquisition funds as 'own funds.'
Additionally, ET Holdings' largest shareholder and CEO, Lee Kyunghwa, is also the CEO of Rewater World. Rewater World was also in a state of complete capital erosion with zero sales as of 2022. Rewater World attempted to participate in a rights offering of Willings, a KOSDAQ-listed company, last year but dropped out. In 2022, it also considered investing in convertible bonds of LIS, which has since been delisted, but canceled the plan.
Meanwhile, Mediazen is a company possessing core technologies in speech recognition and speech synthesis. It is expanding its business into various fields by integrating artificial intelligence (AI) technology into its speech recognition system. Its major clients include Hyundai Kia Motors and Volkswagen.
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