Shinhan Venture Investment Proposes to Dreamus Company Shareholders: "Management Innovation and Enhancing Shareholder Value Needed"

The regular general meeting of shareholders of Dreamus Company, a KOSDAQ-listed company, is scheduled for March, and the second-largest shareholder, Shinhan Venture Investment, has submitted a shareholder proposal urging the replacement of the current management and enhancement of shareholder value.

On the 16th, a Shinhan Venture Investment official stated, “Regarding Dreamus Company, a portfolio listed company of Neoplux 3rd Fund, we have delivered a shareholder proposal as the second-largest shareholder.”

Shinhan Venture Investment holds 23.49% of the voting rights in Dreamus Company through Neospes, a special purpose company (SPC). The largest shareholder is SK Square, holding 38.67% of the shares.

Through this shareholder proposal, Shinhan Venture Investment criticized the poor management performance of Dreamus Company under the current CEO Donghoon Kim, citing stagnant sales, poor profitability, and declining stock price. They also urged reform, stating, “Despite abundant cash assets, the company is not returning value to shareholders, resulting in undervaluation of corporate value.”

According to Shinhan Venture Investment, as of the third quarter of 2024, Dreamus Company holds 86.2 billion KRW in cash assets. As of the end of December last year, the market capitalization was 127.2 billion KRW, and the price-to-book ratio (PBR) was about 0.8. A Shinhan Venture Investment official claimed, “Since the investment in June 2021, there have been no shareholder return policies such as dividends or share buybacks.”

In the shareholder proposal, Shinhan Venture Investment demanded the replacement of the CEO and management. The intention is to appoint capable individuals who can discover new growth engines within the entertainment industry and strengthen the competitiveness of existing businesses. They also called for enhancing shareholder value through a public share buyback. Following Shinhan Venture Investment’s request at the extraordinary general meeting last December, 500 billion KRW of capital reserves were reduced to secure distributable profits under the Commercial Act, and they demand that this resource be utilized.

A Shinhan Venture Investment official said, “To pass the agenda, we will use all possible procedures, including persuading the third-largest shareholder SM Entertainment and minority shareholders and engaging in proxy battles,” adding, “We are proposing and negotiating various measures to enhance shareholder value, such as changing the company name and strengthening investor relations (IR).”

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