KCGI Files Injunction to Prohibit New Share Issuance Related to Hanjin KAL Third-Party Allotment Rights Offering

[Asia Economy Reporter Hyungsoo Park] KCGI announced on the 18th that it has filed an injunction to prohibit the issuance of new shares regarding Hanjin KAL's resolution for a third-party allotment capital increase.

KCGI explained, "Regarding the acquisition of Asiana Airlines by the Hanjin Group decided on the 16th, the Hanjin KAL board of directors resolved a third-party allotment capital increase that significantly changes the current shareholding structure," and "we have filed an injunction with the court."

It added, "In a situation where the management rights dispute has become a reality, allotting new shares to a third party to defend the management rights or control of the management infringes on the shareholders' preemptive rights to subscribe for new shares," and emphasized, "The Supreme Court's established stance is that the issuance of new shares is invalid."

KCGI also pointed out, "The Hanjin KAL board of directors did not go through any procedure to collect shareholders' opinions," and "They hastily pushed forward the issuance of new shares without conducting any due diligence on Asiana Airlines' financial status."

KCGI formed a 'third-party shareholder alliance' in cooperation with Bando Construction and former Korean Air Vice President Cho Hyun-ah. The shareholder alliance has secured a friendly stake of 46.71%.

If the Korea Development Bank participates in the Hanjin KAL capital increase worth 500 billion KRW through a third-party allotment, it will emerge as a major shareholder with a 10.66% stake. If the capital increase proceeds as planned, the shareholder alliance's stake will decrease to about 42%.

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