Alphabiz - Hoban Group Sells Entire Stake in LS Corp., Easing “Control Dispute” Concerns

Photo courtesy of Yonhap News

[Alpha Biz= Paul Lee] Hoban Group has reportedly sold its entire stake in LS Corp., the holding company of LS Group, which had raised industry concerns earlier this year over potential attempts to influence management.


According to investment banking (IB) industry sources on November 21, Hoban Group sequentially disposed of its 4% stake in LS Corp. from last month through recent weeks. The company had initially acquired slightly below 3% earlier this year, later increasing its holdings to more than 4%.


Hoban’s acquisition of over 3% prompted speculation that the group aimed to gain leverage in its ongoing technology dispute between its affiliate, Taihan Cable & Solution, and LS Group’s LS Cable & System. Police have been investigating allegations that core design know-how related to subsea and long-distance high-voltage direct-current (HVDC) cable facilities at LS Cable & System was leaked to Taihan starting last June. LS has stated it will pursue damages if the investigation confirms technology theft.


Under Korea’s Commercial Act, shareholders with 3% or more of a listed company’s shares can exercise significant rights, including calling an extraordinary general meeting, filing for director dismissal, and requesting access to accounting records. This fueled analysis that Hoban may have sought to pressure LS Group’s management and gain insight into LS Cable & System via LS Corp.


Hoban Group, however, denied any intention of engaging in a governance dispute, stating that both the purchase and sale of LS Corp. shares were “purely investment decisions based on the growth potential of the cable industry.”

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)