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[Alpha Biz=(Chicago) Reporter Paul Lee] The dispute between DB HiTek and KCGI, the second-largest shareholder private equity fund operator, is intensifying. The KCGI said, "DB HiTek is not active in requesting data," and filed for an injunction to read and copy accounting books and board minutes. On top of that, the conflict is intensifying as DB HiTek shows signs of discomfort for the first time.
KCGI announced on the 13th that it has filed an injunction with DB Hitech on the 9th to read accounting books, read board minutes, and copy. The reason is that the company requested the provision of the data to enhance shareholder value on the 4th of last month, but the response was delayed, and it received an official letter after the disclosure of the shareholder letter, but the explanation was insufficient.
"The management belatedly responded to the request for data, but it was only a formal excuse and avoided responding to major issues," KCGI said. "We filed an injunction to block the possibility of concealment and disposal of data."
In March, KCGI acquired a 7.05% stake in DB Hitech through Carofi Holdings, a limited investment company. As a result, Carofy Holdings became the second largest shareholder after DB Inc. (12.42%).
At the time, KCGI explained, "We have held an excellent market position in the foundry market for many years and recorded an excellent operating profit of 46% last year, but the value of the company is extremely undervalued." "We will communicate and cooperate with management, major shareholders and ordinary shareholders in an open manner to establish the right governance structure and enhance corporate value," he said.
Since then, the KCGI has released a shareholders' letter on the 1st, which includes measures to advance governance, saying the company does not show its willingness to consult. "DB Hitech operates like a private company of the controlling shareholder family despite its listing," KCGI said in a shareholder letter. "An independent board of directors should be formed for shareholders and an advanced internal control system should be introduced to prevent unnecessary outflow of company assets and protect shareholder rights."
The DB HiTek expressed displeasure with KCGI's move. Even though it is in the process of preparing for a smooth face-to-face consultation, it is somewhat absurd that KCGI suddenly filed for an injunction.
DB HiTek is determined to actively engage in consultations with KCGI. "I'm sorry, but we plan to do our best to ensure in-depth dialogue, including additional explanations from the company, if necessary in the process of face-to-face consultations in the future," a company official said.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
