Align Partners, an activist fund led by Chief Executive Lee Chang-hwan, filed a lawsuit seeking to nullify SOLUM's new share issuance. The move targets SOLUM's decision last year to issue redeemable convertible preferred shares (RCPS) worth 120 billion won. Earlier, an individual SOLUM shareholder, Lee Jong-sang, also filed a similar suit against SOLUM.
On the 13th, SOLUM disclosed that Align Partners Asset Management filed a lawsuit with the Suwon District Court to nullify the new share issuance. Align Partners requested that the issuance of all 7 million RCPS that SOLUM issued on Jul. 5 last year be nullified.
At the time, SOLUM issued RCPS at 17,108 won per share for operating funds and to acquire other companies' securities. SOLUM said it would use the raised funds to expand the overseas sales network for electronic shelf labels (ESL) and to establish new manufacturing subsidiaries.
In response, SOLUM's minority shareholders argue that the RCPS issuance was intended to defend Chief Executive Jeon Seong-ho's management control and strengthen his dominance. With Align Partners joining minority shareholders in taking legal action, the legal battle over SOLUM's new share issuance is expected to intensify.
Align Partners holds 9.21% of SOLUM's equity. The consolidated minority shareholder equity is about 8.57%, and together the two sides hold 17.78%, exceeding the largest shareholder group's stake of 16.3%.
SOLUM said it will respond "in accordance with legal procedures."