Align Partners and Minority Shareholders File Lawsuit to Nullify SoluM's 120 Billion Won New Share Issuance

Activist fund Align Partners and minority shareholders have filed a lawsuit demanding the cancellation of SoluM's issuance of redeemable convertible preferred shares (RCPS) worth 120 billion won.

According to the Financial Supervisory Service's electronic disclosure system (DART) on January 14, SoluM announced the previous day that "Align Partners Asset Management and one other party have filed a lawsuit with the Suwon District Court to nullify the issuance of new shares." On January 12, SoluM also reported that an individual shareholder had filed a similar lawsuit.

Align Partners requested the nullification of SoluM's issuance of a total of 7 million RCPS, which were issued in July of last year. This amount was determined through a board resolution in June of last year, with the shares allocated to a third party. At that time, SoluM issued a total of 7 million RCPS at 17,108 won per share, citing the need to raise operating funds and capital for acquiring securities of other companies.

Minority shareholders of SoluM have opposed the RCPS issuance, claiming it was a measure by CEO Jeon Seongho to defend his management rights and strengthen his control. With Align Partners also filing a lawsuit, the legal dispute over the new share issuance is expected to intensify further.

As of the end of last year, Align Partners held an 8.04% stake in SoluM. The coalition of general shareholders, organized through the shareholder action platform ACT, reportedly holds about 8.57%.