SNT Holdings demanded a full withdrawal of SMEC's plan to dispose of a large block of treasury shares, calling it a "breach of trust that directly violates the principle of shareholder equality and directors' duty of loyalty." SNT Holdings is the largest shareholder, holding about 20.20% of SMEC's outstanding shares.
SMEC disclosed on the 26th three plans to dispose of treasury shares. It will sell 770,000 shares to Manho Rope & Wire at 6,498 won per share, a 5% discount to market price, and will grant 1 million treasury shares to the employee stock ownership association free of charge. It also calls for selling 907,031 treasury shares to 67 members of the employee stock ownership association at 5,196 won per share, a 20% discount.
SNT Holdings noted, "Although the disposal of treasury shares is formally framed as employee compensation or a strategic alliance, in substance it can only be seen as a transaction intended to strengthen the voting rights of the existing controlling shareholder."
As reasons, it cited ▲ not giving ordinary shareholders the opportunity to buy treasury shares ▲ transferring treasury shares at a discount or free of charge only to Manho Rope & Wire and the employee stock ownership association, which are a specific friendly bloc, arguing that this "violates the duty imposed on directors under the amended Commercial Act to treat the interests of all shareholders fairly."
It also raised issues with the timing of the transaction. Because the disposal occurred just days before the treasury share disclosure rules took effect, it said the move appears intended to evade regulation. It emphasized in particular that doing so three days before the 2025 regular shareholders meeting could directly affect the voting structure.
SNT Holdings said it would take all possible legal action if transactions with potential legal violations are pushed through against SMEC, the employee stock ownership association, and Manho Rope & Wire. SNT Holdings said, "Treasury shares are the joint asset of all shareholders," and "the disposal of treasury shares that has devolved into a management control defense tool cannot be tolerated."
Meanwhile, SNT Holdings became the largest shareholder by acquiring a 14.74% equity stake in SMEC (about 10.05 million shares) on July 14. Then, on Nov. 24, it changed the purpose of its SMEC equity holding from "pure investment" to "to influence management control," and acquired an additional 5.46% stake (about 3.72 million shares). SNT Holdings' current equity stake in SMEC is 20.20%.