'Management Dispute' at Daol Investment Securities...Minority Shareholders Likely to Hold Casting Vote

Annual General Meeting on 15th Held in Yeouido, Seoul
'2nd Largest Shareholder' CEO Kim Gisu Proposes 12 Shareholder Motions
Intense Behind-the-Scenes Litigation Continues

The management rights conflict between Lee Byung-chul, chairman of Daol Financial Group and the largest shareholder of Daol Investment & Securities, and Kim Ki-soo, CEO of Presto Advisory and the second-largest shareholder, is expected to be decided at the March shareholders' meeting. Since Chairman Lee's stake defending management rights is only 25%, it is anticipated that the votes of minority shareholders will play a 'casting vote' role.

According to the financial investment industry on the 7th, Daol Investment & Securities plans to hold its regular shareholders' meeting on the morning of the 15th in Yeouido, Seoul.

The key issue at this shareholders' meeting is the shareholder proposals submitted by CEO Kim Ki-soo. Kim proposed a total of 12 shareholder proposals. These include △ the establishment of a recommendatory shareholder proposal system △ the establishment of a remuneration review at the shareholders' meeting △ changes in the number of directors △ changes in term of office △ differentiated cash dividends, among others. There is also the proposal to appoint outside director Kang Hyung-gu. However, if the proposal to establish a recommendatory shareholder proposal system is rejected, all other proposals will be automatically discarded according to Article 361 of the Commercial Act.

Before the shareholders' meeting, CEO Kim also applied to the court to approve the appointment of an inspector for the meeting. According to the Commercial Act, shareholders holding at least 1% of the total issued shares can request the court to appoint an inspector to investigate whether the convening procedures or resolutions of the meeting are lawful. This means they intend to monitor whether there are any 'defects' in the shareholders' meeting procedures.

The relatively small difference in shareholding ratios between the largest and second-largest shareholders also fuels the management rights dispute. Currently, Chairman Lee Byung-chul and related parties hold 25.19% of shares. The difference with CEO Kim Ki-soo's stake (14.34%) is about 11 percentage points. Including treasury shares of 2.86%, the total is only 28.05%. This is why attention is focused on the votes of minority shareholders who hold about 58% of the shares. Kim's side is encouraging minority shareholders to electronically delegate voting rights through the activist platform service 'B-Side.'

Behind the scenes, litigation continues ahead of the shareholders' meeting. Earlier, on the 20th of last month, the Seoul Southern District Court ruled that Kim's provisional injunction lawsuit was excessive in scope except for partial approval to inspect accounting books. Of the 16 requested items, the plaintiff voluntarily withdrew 5, and the court finally approved 3. The approved items are △ documents related to loans and guarantees at the investment decision stage for sites where losses occurred in real estate project financing (PF) △ documents related to loan claims and private bonds that failed refinancing in real estate PF △ documents related to entertainment expenses and welfare expenses. However, Daol's side is disputing two of the three court-approved items. As of the 5th, the company has only submitted documents related to loans and guarantees at the investment decision stage for sites where losses occurred in real estate PF.

A Daol Investment & Securities official explained, "Regarding the loan claims and private bonds that failed refinancing in real estate PF, we informed the court that it is necessary to clarify the scope of what 'failed refinancing' means," adding, "For welfare expenses, since they contain personal information of employees, we cannot provide them immediately, and for entertainment expenses, we requested that they be reviewed based on net operating income."

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