It has been confirmed that the Korea Exchange identified former major shareholder Ahn Sang-hyun as the fundamental cause behind the delisting of Cellfie Global from the KOSDAQ market. This is the first time the claims of minority shareholders of Cellfie Global have been validated through official documentation.
Mr. Ahn is suspected of having secured equity in Cellfie Global through a capital-free merger and acquisition (M&A) and then, after losing it all to forced selling, still exercised control over the company and embezzled funds.
According to the legal and financial investment sectors on the 20th, the Korea Exchange stated in a response letter regarding the injunction filed by the Cellfie Global minority shareholders' association that "Mr. Ahn is considered to have exercised effective control over Cellfie Global."
This issue emerged when Cellfie Global received an audit opinion of 'disqualification' in its 2023 business report. The audit opinion changed to 'appropriate' following a re-audit in November of the following year, resolving the reason for delisting; however, internal controls and governance issues were once again brought to light.
The Korea Exchange decided in January to subject Cellfie Global to a substantive review of listing qualifications, and in May, convened the KOSDAQ Market Committee to confirm the delisting. In response, minority shareholders have pooled their equity to form a union and are engaged in legal battles to prevent the delisting.
The Korea Exchange believes that Mr. Ahn's influence was significant in the process of Cellfie Global's delisting, following his capital-free M&A to control the company.
According to the Korea Exchange, Mr. Ahn became the largest shareholder of Cellfie Global by using borrowed funds from companies such as Pusense, Orum F&B, and Rocket International. The collateral for the borrowings was shares of Cellfie Global.
As the stock price of Cellfie Global plummeted, Mr. Ahn was forced to sell, losing his position as the largest shareholder. However, Mr. Ahn took control of the board and management, forcing expenditures of 1 billion won for the acquisition of convertible bonds from Foodnova, thus exercising authority as a de facto chairman. The embezzlement and breach of trust allegations against Mr. Ahn are estimated to have caused a loss of 11 billion won to Cellfie Global.
The Korea Exchange judged that "considering all factors, Mr. Ahn's existence is the fundamental cause of the delisting crisis for Cellfie Global."
Mr. Ahn is known to have been deeply involved in the processes that led to the impairment of Youtech, Melpas, and DIDIM E&F, which have already been delisted from the KOSDAQ market. Similar to Cellfie Global, he utilized capital-free M&A to acquire corporations and siphoned off company funds. Ultimately, Melpas and DIDIM E&F fell into a state of limitation and were delisted, and the losses became the shareholders' burden.
It remains uncertain how the response letter from the Korea Exchange will affect the court's judgment regarding the injunction filed by the Cellfie Global minority shareholders' association to suspend the delisting decision. However, the court postponed its decision on the injunction request for four months during a hearing held on the 12th. Given that decisions on injunction requests typically come within a month of the hearing, this delay is unusual.