A court has rejected an injunction filed by minority shareholders of Hanyang Securities seeking to block a new share issuance, allowing the company to proceed with its 50 billion won rights offering as planned.
Hanyang Securities said in a regulatory filing Wednesday that the 51st Civil Division of the Seoul Southern District Court dismissed the injunction shareholders had filed against the company to halt the new share issuance.
Earlier, Hanyang Securities decided on a third-party allotment rights offering worth about 50 billion won through a board resolution on the 25th of last month, issuing 2,380,952 common shares to its largest shareholder, KCGI No. 2 Private Equity Fund (KCGI PEF).
In response, minority shareholders filed the injunction, arguing that the rights offering aimed to strengthen the largest shareholder's control and that the third-party allotment method violated the principle of shareholder equality.
However, the court determined that Hanyang Securities had been preparing to enter the over-the-counter (OTC) derivatives business since October last year, and that the need to expand its equity capital to bolster its net capital ratio (NCR) was recognized. "It is difficult to conclude that the purpose was to strengthen the largest shareholder's control or that there was no management objective," the court said.
The court also determined that the new share issuance price could not be seen as significantly unfair. It noted that the issuance price of 21,000 won was calculated by applying a 12.9% premium to the base share price under the relevant regulations. The court explained that net asset value per share is only one of several valuation metrics, and that the price the largest shareholder paid when acquiring management control reflected a management premium.
The court further stated that "the determination of the need for fundraising, the selection of means, and decisions on timing and scale are matters of the board's business judgment that should be respected," and found that the fairness-enhancing measures demanded by minority shareholders were not requirements that must necessarily be fulfilled under the relevant laws.
Following the court's dismissal, Hanyang Securities plans to complete the rights offering procedures as originally planned. The payment date for the new shares is Wednesday, and the listing is scheduled for the 20th.
