All agenda items raised at the extraordinary general meeting of Zinitix, a specialist in system semiconductors, were rejected. The current management and the largest shareholder, Halo Microelectronics International Corporation (Halo, 35.45% equity), failed to achieve any success amidst a management dispute. The two sides are expected to face off again at the extraordinary general meeting scheduled for September.
According to the financial investment industry on the 23rd, Zinitix held an extraordinary general meeting at its headquarters in Yongin, Gyeonggi Province, that morning. The key agenda included a dismissal proposal for Chief Executive Officer Seok-man Kwon, raised by Halo, along with the appointment of new internal and other non-executive directors recommended by the current management.
The dismissal of directors must meet the special resolution requirement of receiving support from two-thirds of attending shareholders, which was not met. In the case of appointing new directors, it corresponds to the ordinary resolution requirement, which requires a majority vote from attending shareholders; however, it was also rejected due to opposition from Halo, the largest shareholder. The amendment to the articles of incorporation restricting the issuance of new shares and convertible bonds also failed to pass the threshold of the extraordinary general meeting.
Originally, the extraordinary general meeting was also set to include an agenda item to appoint three internal and other non-executive director candidates from Halo, including Halo Chairman Tao Hai. However, the agenda was removed after the Ministry of Trade, Industry and Energy determined that Zinitix's 'touch controller embedded AMOLED display driving SoC design technology' qualifies as a key national technology in the semiconductor field.
According to the Industrial Technology Protection Act, foreign participation in the core decision-making and management activities of a company that possesses key national technologies requires the approval of the Minister of Trade, Industry and Energy. Two of the nominated director candidates from Halo are foreign nationals. (☞[Exclusive] Zinitix faces setbacks due to national key technology designation and major shareholder's proposal challenges)
Zinitix plans to hold another extraordinary general meeting on September 10 to address the agenda of appointing three candidates for internal and other non-executive directors, including Chairman Tao Hai. The direction of the dispute is expected to be determined based on whether approval from the Minister of Trade, Industry and Energy is obtained by the time the next extraordinary general meeting is held.
However, Halo criticized the current management of Zinitix for using the designation of key national technology as a means of improper management defense. According to this, simple director appointments are not subject to the Industrial Technology Protection Act.
Halo stated in a press release that it respects the government's decision regarding Zinitix's designation as a key national technology but added that 'the current management's deliberate obstruction of the shareholders' meeting resolution under the guise of this is a clear infringement of shareholder rights.' It also emphasized, 'We will seek legal accountability for the unlawful actions of the current management and do our best for the normalization of Zinitix.'
Halo has claimed that the current management is attempting to leak technology and seize control of a company they established. The current management countered that Halo's assertions are untrue. Both sides are engaged in legal battles, including criminal complaints, claiming that the other is spreading false information.