SNT Holdings, which became the largest shareholder of KOSDAQ-listed SMEC, issued a statement on the 26th, saying that "although we have diligently carried out the necessary consultations and procedures for management participation, an environment for practical preparation has not been created," and added, "if restrictions on the exercise of shareholder rights and uncertainty over the company's valuation continue, we will have no choice but to consider responses, including extraordinary measures."
SNT Group and Chair Choi Pyeong-gyu became the largest shareholders starting last year by acquiring 13.65% and 6.55% of SMEC's equity, respectively. In response, SMEC CEO Choi Yeong-seop pushed back by additionally acquiring equity and disposing of treasury shares to friendly parties, triggering a management control dispute.
First, SNT Holdings moved to formalize its management participation by submitting a shareholder proposal on the appointment of directors and Audit Committee Commissioners ahead of next month's regular shareholders meeting. However, SNT Holdings pointed out that SMEC claims the shareholder proposal was not delivered and is evading the proposal.
The company said, "We sent the shareholder proposal by email, fax, and content-certified mail on Feb. 10, but the registered mail and content-certified mail sent to SMEC's head office address were consecutively marked 'closed/no one present,' despite being normal business days," and explained, "it appears they intentionally avoided receipt until the official receipt date of Feb. 13." SNT Holdings also mobilized various means beyond email and fax, including text messages, KakaoTalk, and visiting the CEO's residence. However, SMEC claims the shareholder proposal was not delivered.
It also noted that SMEC has not complied with requests to inspect and copy accounting books, blocking the confirmation of serious suspicions related to company value. Specific suspicions include urgently disposed treasury shares, repeated fund transfers through internal transactions, and accounting and financial red flags found in transactions with overseas subsidiaries. SNT Holdings said that the lack of related information has created difficulties in assessing company value and deciding on additional capital injections.
SMEC argues that inspection of the accounting books should be restricted because it is in a competitive relationship with SNT Dynamics, but SNT Holdings countered, "considering the share of sales from machine tools and market share, it is hard to view the two companies as being in a substantive competitive relationship."
Regarding the provision of the shareholder registry, the court ordered it to be provided by granting an injunction, but SMEC did not receive it. As a result, if the registry is not provided in a timely manner, the solicitation for proxy voting cannot proceed in principle, making a head-to-head vote at this year's regular shareholders meeting effectively difficult, it argued.
SNT Holdings also claimed it has not received information related to WIA, in which SMEC made a joint investment. The company said, "Despite this being a matter that could have a significant impact on assessing company value and on judging the financial and legal burdens at the time of additional capital injection, related information remains completely in the dark."