Stride Partners and Leaf Investment Advisory Demand HPO to "Strengthen Board Independence and Withdraw Subsidiary Listing"

Major shareholders of HPO, a health functional food specialist company, have officially demanded the strengthening of board independence and the withdrawal of the subsidiary listing plan.

Stride Partners and Leaf Investment Advisory stated in an official position on the 12th, "Concerns are growing regarding HPO's current governance operation method and recent major decision-making," adding, "Considering the impact on corporate value, a careful reconsideration is deemed necessary."

Stride Partners is a financial investment company specializing in various asset classes such as listed stocks, unlisted stocks, and mezzanine, while Leaf Investment Advisory is a financial company holding licenses for discretionary investment and advisory services.

Both institutions proposed the appointment of outside directors who become audit committee members elected separately as a measure to strengthen board independence and requested that this be submitted as an agenda item at this year's regular shareholders' meeting.

Stride Partners and Leaf Investment Advisory argued, "Currently, the influence of certain shareholders within the board is relatively high, and the opinions of various stakeholders are not sufficiently reflected," adding, "For sustainable corporate growth, the board's independence must be strengthened to enhance the management oversight function and maximize shareholder value."

They also pointed out, "Some outside directors have previously damaged shareholder value and have played a role in protecting the interests of controlling shareholders rather than checking the management," specifically noting, "Outside director Min Jeong-gi previously served as an outside director of Kona I and failed to check the controlling shareholder family's private benefit appropriation."

Furthermore, they raised the issue of a lack of independence in the outside director appointment process and stated that appointing audit committee members elected separately is necessary to strengthen management oversight functions.

Regarding HPO's recently announced subsidiary listing plan, they expressed concerns about its impact on existing shareholders and requested a more cautious approach. The two institutions explained, "Currently, dual listings in the Korean market carry a high risk of shareholder value dilution and corporate value distortion, and institutional investors maintain a conservative stance on dual listings," adding, "Considering this market evaluation, a permanent withdrawal of the subsidiary listing plan is necessary."

They also pointed out that the structure relying on subsidiary growth amid stagnation in the core health functional food business continues, and that stock prices have been declining due to IPO concerns.

Meanwhile, the two institutions requested the establishment of a concrete plan to enhance corporate value and clear disclosure to the market. As specific measures to enhance corporate value, they proposed shareholder-friendly policies such as expanding dividends, share buybacks, and active investor relations (IR) activities.