Paratech's Former Major Shareholder BaseHD Faces Contract Non-Compliance Controversy

Refusal to Complete Contract After Final Payment
BaseHD Also Unpaid Loan Borrowed from Paratech
Management Rights Already Transferred

[Asia Economy Reporter Jang Hyowon] The sale of Paratech, a company listed on the KOSDAQ, is being delayed at the final stage. Although the management rights and some shares have already been acquired by the buyer, NSE&G, there is a disagreement over the payment of the remaining balance.

The former largest shareholder, Base HD, stated that the buyer has not paid the remaining balance. On the other hand, NSE&G, the buyer, claims that they prepared the remaining payment and waited at Paratech’s office on the contract completion day, but Base HD unilaterally refused to complete the contract. They also argue that Base HD did not fulfill the precedent conditions specified in the contract.

According to the electronic disclosure by the Financial Supervisory Service on the 3rd, Base HD, the largest shareholder of Paratech, announced that the stock transfer contract with NSE&G and others has been postponed from the 29th of last month to the 5th of this month.

On October 7th last year, Base HD and NSE&G signed a contract to transfer 5,553,192 shares of Paratech at 7,600 KRW per share, totaling 42.2 billion KRW. NSE&G paid a deposit of 4.22 billion KRW on the same day, and on November 11th last year, Paratech New Technology Investment Association No.1, a financial investor (FI), paid an interim payment of 14.3 billion KRW.

Subsequently, on the 15th of last month, another FI, Natural Sketch and Albatross Association, acquired the rights to purchase shares and paid an additional 9.1 billion KRW to Base HD. The contract was to be completed by paying the remaining balance of 14.5 billion KRW for 2,466,485 shares on the 29th of last month.

Regarding the reason for the delay, Base HD stated that the buyer (NSE&G and others) did not pay the remaining balance. They also claimed that the contract could not be completed because some of the share purchasers who were to pay the balance had changed.

However, according to the balance certificate presented by NSE&G, the remaining balance of 14.5 billion KRW was prepared in the buyer’s account on the contract completion date. The contract also specifies that changes in share purchasers are allowed.

In fact, although the interim payment purchaser changed from the initial contracting party, the transfer payment was made without any issues, and Base HD also transferred the shares. Furthermore, at the shareholders’ meeting held on the 30th of last year, Base HD handed over management rights to NSE&G.

A Base HD official said, “Although the contract includes a clause allowing the change of share purchasers, it did not specify multiple changes, so we did not agree to the last change of the party paying the remaining balance. In any case, the contract was delayed because the balance was not deposited.”

On the other hand, NSE&G claims that Base HD is the party that did not fulfill the contract terms.

NSE&G stated that they tried to complete the share transaction on the payment date of the remaining balance, the 29th of last month, but Base HD refused. According to the stock transfer contract, Base HD and its affiliates must repay the 18.9 billion KRW borrowed from Paratech by one day before the payment date of the remaining balance. They must also release the joint guarantee provided by Paratech to Base HD.

Nevertheless, Base HD did not fulfill the obligation to recover the loan or release the collateral by the payment date of the remaining balance, the 29th of last month. Although they have the capacity to repay since they already received 27.6 billion KRW in deposits and interim payments, they did not fulfill the contract obligations.

Regarding this, Base HD said, “The contract states that the loan should be repaid by one day before the remaining balance payment, but there was a verbal agreement to handle the loan after receiving the balance. We planned to repay the loan fully once the balance was deposited.”

NSE&G responded, “Currently, 14.5 billion KRW remains as the balance, but Base HD borrowed 18.9 billion KRW from Paratech. In this situation, it is questionable whether Base HD has the capacity to repay the remaining loan.”

Meanwhile, Paratech’s sale has been canceled twice before. Base HD owns affiliates such as KAMU E&C, Myeongdong AMC, Taeheung Industry, Hunid, Kumyang International, and Korea Aluminum, which are listed on the KOSPI.

This content was produced with the assistance of AI translation services.