The TERA SCIENCE minority shareholders' coalition and the former management have withdrawn their request for an injunction against the issuance of new shares to qualify for rehabilitation. TERA SCIENCE, which saw its stock price surge as a lithium-themed stock, is currently in a trading suspension after a sharp decline.
According to the Financial Supervisory Service electronic disclosure system on the 12th, TERA SCIENCE announced that it had withdrawn the lawsuit for invalidating the issuance of new shares that was filed by former executive Kwon and 10 minority shareholders with the Changwon District Court.
Kwon and the minority shareholders' coalition claim that the current management's embezzlement and breach of trust amount to 28.2 billion won. In October 2024, they also filed a complaint against the current management with the Seoul Metropolitan Police Agency. The minority shareholders' coalition noted that 'if they receive an asset preservation order for TERA SCIENCE from the court through corporate rehabilitation procedures, they can confirm contingent liabilities and conduct external audits again,' adding, 'afterward, they can legally replace the board of directors and normalize the company.'
However, following the rejection of their request for the initiation of rehabilitation procedures in June of last year and again in February this year, the reason was simple: they did not meet the qualifications. A rehabilitation request can be filed by shareholders and equity holders who possess at least one-tenth of the stock or capital. They claim to hold 9,709,961 shares, which is more than one-tenth of TERA SCIENCE's owned stock, and applied for the initiation of rehabilitation procedures on Nov. 1, 2024. At that time, the total number of issued shares was 95,587,404, accounting for 10.15%.
However, the situation changed when the current management decided to conduct a third-party allocated paid-in capital increase of 15 billion won on Dec. 13, 2024, one month later. They paid the capital increase for 10,791,366 common shares on Dec. 23, and it was listed on Jan. 8. The issuance price per share was 139 won, which was one-fifth of the stock price before the trading suspension (654 won). Consequently, the equity of the minority shareholders who applied for the rehabilitation procedure decreased to 9.12%. The minority shareholders and former management hastily filed for an injunction against the issuance of new shares on Jan. 22, but the court deemed the injunction request for the issuance of new shares as inappropriate and dismissed the remaining requests.