Hanwha Solutions issued a formal apology over controversy about whether it held prior consultations with the Financial Supervisory Service regarding its rights offering.
On the 5th, Hanwha Solutions said in a statement, "At a recent meeting with individual shareholders, there were expressions in the explanation related to the Financial Supervisory Service that were not consistent with the facts," and added, "We apologize for causing confusion in shareholders' judgment with incorrect information."
The controversy flared after the company said at a meeting on the 3rd that it had communicated in advance with financial authorities regarding the process of pursuing the rights offering. During this process, wording was reportedly used that could be taken to mean the company consulted with the authorities in advance about the rights offering plan or sought their understanding.
In response, the Financial Supervisory Service moved quickly to clarify. The Financial Supervisory Service (FSS) said in an explanatory note to the press, "There was no prior consultation or approval related to the rights offering," and asked the company to explain the circumstances of the remarks and the facts.
Hanwha Solutions said, "It is true that we gave prior notice of the plan to file a securities registration statement, but there was no consultation on the contents of the filing or any prior understanding sought for the rights offering." The company added, "The inaccurate expression was an individual's mistake and did not represent the company's official position."
The dispute emerged amid shareholder backlash over Hanwha Solutions' recently released rights offering of about 2.4 trillion won. With a significant portion of the funds to be used for debt repayment, shareholders have criticized it as "passing the buck."
The Financial Supervisory Service is currently reviewing Hanwha Solutions' securities registration statement, taking a comprehensive look at the appropriateness of the stated use of proceeds, investor protection, and communication with shareholders. If necessary, it could take additional steps such as requesting corrections.
In the industry, some say this controversy over the remarks could become a variable in the upcoming review. Previously, the Financial Supervisory Service (FSS) requested corrections in other large-scale rights offerings as well, citing issues with the use-of-funds plan and communication with investors.