Fibonacci Asset Management: "Komelon's 10 Billion Won Treasury Stock Trust Is Just 'Firefighting'... Fundamental Measures Needed"

On March 12, private equity fund manager Fibonacci Asset Management called on Komelon, a tape measure manufacturer, to establish a more fundamental plan to enhance corporate value, stating, "The 10 billion won treasury stock acquisition trust contract disclosed yesterday is a stopgap measure lacking specificity and sustainability."

On this day, Fibonacci Asset Management stated, "This upcoming general shareholders' meeting will be a crucial inflection point for normalizing Komelon's corporate value."

Previously, ahead of Komelon's regular general shareholders' meeting scheduled for March 30, Fibonacci Asset Management submitted shareholder proposals including: ▲ the appointment of Cha Jiho as outside director ▲ the repurchase of treasury shares worth 40.5 billion won, among others.

According to Fibonacci Asset Management, Komelon has posted a return on invested capital (ROIC) in the 30% range over the past three years and has generated more than 20 billion won in annual net profit. The company also holds more than 150 billion won in net cash and financial investment assets. However, Fibonacci Asset Management argues that due to an outdated governance structure and inefficient capital allocation, Komelon's market capitalization remains only about 160 billion won.

Jae Yeob Myung, Team Leader at Fibonacci Asset Management, commented, "It is difficult to dispel the impression that the corporate value enhancement plan disclosed last week and the treasury stock acquisition trust contract announced yesterday are simply 'firefighting' responses ahead of the general shareholders' meeting and the decision on the motion for agenda presentation." He added, "The current board of directors is being criticized for being excessively subordinate to the will of the controlling shareholder."

원본보기 아이콘

He further emphasized, "To normalize board governance by appointing an external director with capital market experience, and to resolve the severe undervaluation of the company, a more concrete capital allocation strategy is required."

In addition, he said, "Fibonacci Asset Management has already presented several specific capital allocation proposals through private channels that can resolve the current severe undervaluation while maintaining the company's growth potential and financial stability. If necessary, we will present these proposals publicly to allow general shareholders to judge for themselves, and we plan to actively pursue their review and implementation by the newly constituted board following the shareholders' meeting."

Meanwhile, among the shareholder proposals submitted by Fibonacci Asset Management, the agenda item for the 'repurchase of treasury shares worth 40.5 billion won' was not included by Komelon as a meeting agenda, and an injunction to add the agenda has been filed with the Busan District Court, Western Branch.

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.