[At a Crossroads for Listed Companies] BioLog Device, What Is the Reality of Major Shareholder Geumseong Chuksan Jinheung? ①

[Asia Economy Reporter Jang Hyowon] Geumseong Livestock Promotion, which became the largest shareholder of KOSDAQ-listed company Biolog Device earlier this year, has recently attracted market attention by lending company funds to other listed companies for investment and other activities.

Capture of the BioLog Device homepage.

According to the Financial Supervisory Service's electronic disclosure on the 26th, on March 30th, Geumseong Livestock Promotion acquired 4.2 million shares (14.55%) from former CEO Lee Jaeseon, the previous largest shareholder of Biolog Device, for 12 billion KRW, becoming the largest shareholder. The acquisition price per share was 2,617 KRW.

Geumseong Livestock Promotion acquired Lee's shares together with lending companies. At that time, Lee offered a total of 6,905,096 shares (23.92%) worth 18 billion KRW, but Geumseong Livestock Promotion only acquired 4.2 million shares, while the remaining 2,705,096 shares were acquired by K-One Holdings and K-One Consulting & Lending for 6 billion KRW.

K-One Holdings and K-One Consulting & Lending each acquired 1,352,548 shares (4.68%) to avoid reporting large shareholding disclosures. This made it impossible for general investors to know that about 10% of the shares could be sold on the market at any time.

All acquisition funds raised by Geumseong Livestock Promotion itself were borrowed money. Geumseong Livestock Promotion borrowed acquisition funds by pledging real estate located in Myeongdong, Seoul. The Myeongdong property has been registered under Geumseong Livestock Promotion's name since around 1954.

Geumseong Livestock Promotion, established in 1949, operates in livestock farming and real estate leasing. Former CEO Jo Jongsu led the company for a long time, and CEO Hwang Hoon was appointed for the first time in September last year. However, as of the end of Q1 this year, the largest shareholder is former CEO Jo, holding about 26%.

Geumseong Livestock Promotion is a company with limited cash-generating ability. As of the end of June 2020 (fiscal year ending June), it recorded sales of 900 million KRW and a net loss of 30 million KRW. Sales over the past three years have mostly hovered around 900 million KRW.

CEO Hwang Hoon has stated in media interviews that he manages defense industry company Eunsan Enterprise and bio company Bio Impact, and aims to develop Biolog Device into a top-tier company.

In particular, Eunsan Enterprise promoted itself as famous for introducing and delivering Lockheed Martin's Aegis system for 4 trillion KRW in 2017. The company claimed to have supplied the Aegis computer system and related components.

However, as of the end of last year, Eunsan Enterprise is a small company with total assets of 2.5 billion KRW. It recorded sales of 2.4 billion KRW and operating profit of 600 million KRW last year. Sales over the past three years ranged from 1.3 billion to 2 billion KRW, indicating limited cash-generating ability.

Bio Impact was also established in June last year with capital of 100 million KRW and is a company researching and developing health functional foods in Jeju. However, it is known that it has not yet generated any performance.

Regarding this, the company said, "It is true that CEO Hwang has built a global network through long-term operation of defense companies," and "He plans to grow Biolog Device through this."

Meanwhile, Biolog Device is a company primarily engaged in manufacturing smartphone camera module parts. As of the end of Q1 this year, it recorded sales of 18.6 billion KRW and an operating loss of 2.4 billion KRW, representing a 40.6% decrease in sales and a swing to a loss compared to the same period last year.

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