The Financial Supervisory Service demanded that Woori Financial Group, which is pushing to make Tongyang Life Insurance a wholly owned subsidiary, supplement its securities registration statement. The FSS is said to have judged that the basis for calculating the stock exchange price in the filing was not specific enough, making it difficult to persuade shareholders. Woori Financial had planned to complete the stock exchange in Aug.
According to the financial industry on the 28th, the Financial Supervisory Service on the 26th demanded corrections to, and suspended the effectiveness of, Woori Financial's securities registration statement (comprehensive exchange and transfer of shares). The reason was that entries on key matters were unclear and could hinder investors' reasonable investment decisions. Woori Financial must submit a corrected filing within three months; if it does not, it will be deemed to have withdrawn the plan.
The Financial Supervisory Service was said to have demanded that the securities registration statement describe the decision-making process at the time of pricing in more detail and clearly present grounds for the stock exchange that could persuade shareholders on both sides. It was also reported to be checking whether the exchange ratio was set unfavorably for minority shareholders of Tongyang Life Insurance, as Woori Financial supported its share price during the exchange calculation period through share buybacks and cancellations.
Minority shareholders of Tongyang Life Insurance argue that Tongyang Life Insurance's corporate value was not fully reflected in the process of calculating the stock exchange ratio between Woori Financial and Tongyang Life Insurance. They are preparing to file for a court injunction to block the new share issuance Woori Financial is pursuing for the stock exchange, while continuously submitting related complaints to the Financial Supervisory Service. The Financial Supervisory Service was said to have reviewed whether their claims were reasonable after receiving the complaints.
Woori Financial announced that it held a board meeting on the 24th of last month and decided on a comprehensive exchange of shares with Tongyang Life Insurance. Woori Financial currently holds a 75.34% equity stake in Tongyang Life Insurance, and the stock exchange ratio is 0.2521056 share of Woori Financial Group common stock per one share of Tongyang Life Insurance. The exchange values were set at 34,589 won for Woori Financial and 8,720 won for Tongyang Life Insurance.
The total number of new shares to be issued by Woori Financial is 8,696,875, equivalent to 1.19% of the 727,806,728 shares outstanding excluding treasury shares. Woori Financial plans a board meeting on Jul. 24, and Tongyang Life Insurance plans an extraordinary shareholders meeting, with the stock exchange to be completed on Aug. 11.
A Woori Financial official said, "We do not expect this matter to change the stock exchange schedule. We plan to prepare the correction filing without a hitch."