Mason Capital Minority Shareholders File Injunction to Prohibit Voting Rights on 2.7 Million Shares

[Asia Economy Reporter Hyunseok Yoo] Mason Capital Minority Shareholders Alliance (hereinafter Shareholders Alliance) announced on the 26th that it has filed an injunction with the court to prohibit the exercise of voting rights on 2.7 million shares held by DKAR Investment, a special related party of the largest shareholder.

The Shareholders Alliance explained that DKAR Investment failed to disclose the fact that it had provided 2.7 million shares as collateral to Mr. Choi around June 2018, and thus filed the injunction. The Shareholders Alliance also reported this fact to the Financial Supervisory Service.

Along with the injunction application, the Shareholders Alliance filed a complaint with the Seoul Central District Prosecutors' Office against Yoon Seok-jun, CEO of JD Holdings, the representative partner of the largest shareholder JD Global Asset Partnership, and Park Cheol-hyun, CEO of DKAR Investment, for violating reporting obligations under the Capital Markets Act.

The Shareholders Alliance stated, "DKAR Investment provided 11 million shares as collateral to Shinhan Capital and Namyang Savings Bank but only disclosed this fact in December last year, two years after the event," adding, "Ultimately, DKAR Investment violated Article 147 of the Capital Markets Act by failing to report ‘important matters’ related to shares held by a major shareholder of a listed company."

Jung Byung-won, lead attorney at Law Firm Jiwoo, who is providing legal counsel to the Shareholders Alliance, said, “JD Global Asset Partnership or CEO Yoon Seok-jun may claim it was a ‘simple delayed disclosure,’ but if the reporting period stipulated in Article 147 of the Capital Markets Act is not met, it constitutes ‘non-disclosure’ itself, and the law does not recognize the concept of delayed disclosure,” adding, “If the court grants the injunction, the 2.7 million shares held by the major shareholder side will not be able to exercise voting rights at this general meeting.”

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