Dae Yang Metal Management Dispute to be Decided on the 20th

Showdown Over Management Structure at Extraordinary General Meeting

The outcome of the dispute over the management rights of Daeyang Metal, a stainless steel cold-rolled sheet specialist company, between the existing management and KH Group is expected to be decided at the extraordinary general meeting of shareholders to be held on the 20th.

According to the Financial Supervisory Service’s electronic disclosure and the company’s explanation on the 18th, since there are no other shareholder proposals, the vote at the extraordinary general meeting on the 20th will be held only on the agenda proposed by the existing management. The existing management proposed the dismissal of four directors and one auditor appointed by the BBWON Association of KH Group, and the appointment of eight directors and one auditor from the existing management side.

Earlier, in July last year, the BBWON Association announced the acquisition of a 6.1% stake, signaling the start of the management rights dispute. Subsequently, on October 30 of last year, both the existing management and the BBWON Association held extraordinary general meetings at different locations on the same day, an unprecedented event. At that time, the BBWON Association registered the directors they appointed at the Yesan Registry Office in Chungnam and exercised management rights.

However, the situation reversed when Daeyang Holdings Company, representing the existing management, filed an objection against the Yesan Registry Office in Chungnam, which was accepted in January this year, leading to the formal inauguration of CEO Jeong Ji-su, appointed by the existing management. Following this, the Hongseong branch of the Daejeon District Court ruled in February to grant the injunction requested by the existing management to prohibit the BBWON Association from executing business.

Accordingly, the extraordinary general meeting on the 20th is expected to be a turning point in the management rights dispute. Both sides are currently vigorously encouraging participation in proxy voting.

Meanwhile, a Daeyang Metal official stated, “We plan to file a police complaint regarding the tangible and intangible losses incurred by the company during the period of illegal occupation by KH Group.” The company claims that abnormal costs of approximately 1.4 billion KRW occurred during the three months of unauthorized occupation by KH Group, including labor costs for hiring 21 new employees, management consulting, and legal fees.