StageX "Capital of 205 billion KRW due in May? No legal basis"

Ministry of Science and ICT's Cancellation Announcement Met with "Regret"
"Fact Clarification Through Hearing Procedure"

StageX, facing the risk of collapse as the 4th mobile carrier, opposed the Ministry of Science and ICT's announcement by stating that "the full payment of the capital of 205 billion KRW will be made after the frequency allocation."

On the 14th, StageX stated in a press release, "We regret the Ministry of Science and ICT's announcement of the cancellation of the qualification as a candidate for the 4th mobile carrier," and added, "We will review our future response direction."

Kang Do-hyun, the 2nd Vice Minister of the Ministry of Science and ICT, is briefing on the scheduled cancellation of Stage X's qualification as the 4th mobile carrier candidate at the Government Seoul Office in Jongno-gu, Seoul, on the 14th.
[Photo by Yonhap News]

Earlier that day, Kang Do-hoon, the 2nd Vice Minister of the Ministry of Science and ICT, announced in a briefing that StageX was required to complete the payment of 205 billion KRW in capital by May 7, the submission deadline for the necessary documents, but only about 50 billion KRW had been paid, which was a reason for canceling the frequency allocation.

He also stated that the composition of shareholders and stock ownership ratios must not be changed without the Ministry's approval, and that the pledge to faithfully implement the funding plan described in the allocation application documents was also violated.

In response, StageX rebutted, "There is no legal basis for the requirement that the full payment of 205 billion KRW capital must be completed by May 7."

They further stated, "It is clear that the full payment timing of the 205 billion KRW capital in the frequency usage plan, for which StageX received a notification of 'eligibility' after a supplementary request from the Ministry of Science and ICT, is after the frequency allocation (approval)."

They explained that the frequency usage plan included the content that each shareholder of StageX would invest the capital after approval.

A part of the frequency utilization plan disclosed by Stage X. It includes the content that each constituent shareholder of Stage X will invest capital after approval (frequency allocation).

In particular, StageX and the Ministry of Science and ICT differ in their positions by using the 'frequency usage plan' and the 'frequency allocation application,' respectively, as their standards.

StageX said, "The capital mentioned in the 'application' that the Ministry of Science and ICT keeps referring to is based on the frequency usage plan and is specified on a one-page form," adding, "It indicates the capital at the time when StageX's capital procurement process is completed after approval (allocation)." They added, "It is unreasonable to ignore the frequency usage plan and only mention the 'application' to raise issues."

StageX conveyed, "We have repeatedly informed the Ministry of Science and ICT that there are no planned changes to the composition of shareholders and stock ownership ratios described in the frequency usage plan for the capital procurement plan until the third quarter of this year," and "especially, if there are changes in major shareholders holding more than 5%, we will immediately notify the Ministry and obtain approval."

They also stated that the composition of shareholders and stock ownership ratios as of May 7 are natural phenomena occurring during the sequential formation of the 205 billion KRW capital.

StageX said, "We have already submitted 'confirmation' and 'commitment' documents to the Ministry of Science and ICT to reconfirm the capital payment plan beyond the frequency investment-related documents already submitted," and added, "We will clarify the facts through the hearing process and proceed with the necessary legal and administrative procedures."