"KCGI Alumni Rally"…Simultaneous Wave of Activism Unfolds Around Komelon

Asset Managers with KCGI Background Unite for Shareholder Proposals
Komelon Plans Share Buybacks Following Shareholders' Meeting

Shareholder activism is unfolding around Komelon, a company listed on the KOSDAQ market.

According to the Financial Supervisory Service's electronic disclosure system on March 27, Komelon is scheduled to hold its annual general shareholders' meeting at its headquarters in Busan on March 30. During this meeting, proposals from shareholders—including share buybacks and the appointment of directors—are expected to be discussed, in addition to reports on business performance and financial statements.

Founded in 1963, Komelon is a manufacturer of metal and fiber tape measures, holding the top domestic market share and ranking third globally. As of last year, the company recorded sales of 72.3 billion won and an operating profit of 18 billion won.

In advance of the annual general meeting, Fibonacci Asset Management and Queensguard Asset Management submitted shareholder proposals to Komelon, including the appointment of new directors and share buybacks. Key members of these two asset management firms previously worked together at KCGI. It is analyzed that this activist strategy reflects their past experience at KCGI.

The timing of the establishment of these funds is also similar. According to the Financial Supervisory Service's collective investment vehicle disclosures, the main funds through which the two asset management firms accumulated Komelon shares were established in early November last year, around the same time. It appears that requests to inspect the shareholder registry and the submission of shareholder proposals also occurred at similar times, suggesting that the two firms are acting as a single team.

Komelon has also responded to these shareholder proposals. On March 25, Komelon issued a shareholder letter announcing its official position regarding the recent situation. As a result of a legal review, the company stated that its previously disclosed share buyback plan will proceed according to procedures after the conclusion of the annual general shareholders' meeting.

Meanwhile, Queensguard Asset Management applied to the court for permission to convene an extraordinary general shareholders' meeting on March 23 but withdrew the application the day after Komelon's shareholder letter was released.

Industry experts stated, "Whether there is strategic cooperation between activist funds and whether there will be further moves to secure voting rights are key variables," adding, "This case could become a typical 'prelude' to shareholder activism surrounding domestic small and medium-sized listed companies since the amendment of the Commercial Act."