Brand Refactoring Warns: "Treating Dong Sung Pharm M&A as a Foregone Conclusion Before Rehabilitation Approval Could Distort Creditor and Shareholder Judgment"

Brand Refactoring, the largest shareholder of Dong Sung Pharm, expressed concerns on January 23, stating, "Treating the merger and acquisition (M&A) of Dong Sung Pharm as a foregone conclusion before court approval could distort the judgment of creditors and shareholders."

The company pointed out that, despite being in a conditional stage prior to court approval, repeated exposure of the acquisition structure as if it has already been finalized is distorting the legal framework and procedural steps of the rehabilitation process. Dong Sung Pharm's rehabilitation M&A is currently at a procedural stage that requires approval of the rehabilitation plan and a resolution at the meeting of interested parties. No acquisition structure can have legal effect prior to the court's final decision.

Nevertheless, there are concerns that certain parties are being portrayed as if they have already secured management control, which could confuse trade creditors and shareholders. The company explained that, during rehabilitation proceedings, trade creditors and shareholders must base their decisions on official documents and procedures presented by the court.

Brand Refactoring further pointed out, "Rehabilitation M&A is not simply about capital injection; it is a comprehensive process that examines the structure of debt repayment, future interest burdens, business continuity, and management accountability. However, this essence is being disregarded, and only the message of 'who will acquire the company' is being emphasized, which could be interpreted as a deliberate shift in narrative."

The company also stated, "This trend appears to be a form of public opinion campaign intended to influence the attitudes of trade creditors or secure shareholder consent," and added, "Attempts to pressure the process or establish facts through public opinion, rather than adhering to the fairness and neutrality that the rehabilitation process is based on, could undermine the rational judgment of stakeholders."

In this context, the company emphasized the importance of the role of the Seoul Bankruptcy Court, which manages and supervises the rehabilitation process. Since the rehabilitation system is conducted under strict court management, clear boundaries and oversight are necessary if any particular stakeholder or external opinion attempts to influence the proceedings.

Brand Refactoring concluded, "If the spread of misconceptions or the narrative of a finalized acquisition is left unchecked, it could lead to a loss of trust in the entire rehabilitation process."