As Woori Financial Group filed an amended registration statement to make Tongyang Life Insurance a wholly owned subsidiary, the Financial Supervisory Service is focusing on reviewing the details of a recent shareholder meeting held by Woori Financial. The aim is to check whether the intent was fully conveyed to Tongyang Life Insurance's minority shareholders dissatisfied with the stock exchange. With Tongyang Life Insurance's minority shareholders planning legal action against Woori Financial after this month's shareholders meeting, conflict is expected to continue during the integration process.
According to the financial industry on the 9th, the Financial Supervisory Service (FSS) is reviewing the contents of the securities registration statement that Woori Financial amended and filed on the 3rd. After examining whether sufficient explanations were provided to Tongyang Life Insurance's minority shareholders at a meeting held by Woori Financial last month, the FSS plans to decide by early next week whether additional amendments are necessary.
Woori Financial announced that it decided on Apr. 24 at a board meeting to conduct a comprehensive stock exchange with Tongyang Life Insurance. Woori Financial currently holds a 75.34% equity stake in Tongyang Life Insurance and aims to make it a 100% subsidiary. The stock exchange ratio is 0.2521056 share of Woori Financial Group common stock per 1 share of Tongyang Life Insurance, and the exchange price is set at 34,589 won for Woori Financial and 8,720 won for Tongyang Life Insurance.
Tongyang Life Insurance's minority shareholders have expressed dissatisfaction on grounds that the proposed stock exchange price (8,720 won) and the appraisal right price (8,505 won) are lower than the acquisition price paid by the largest shareholder (10,562 won). As related complaints from Tongyang Life Insurance's minority shareholders continued to be filed, the Financial Supervisory Service (FSS) reportedly suggested that Woori Financial hold an additional shareholder meeting.
In response, Woori Financial held an additional meeting last month and explained the procedures for calculating the stock exchange price. It also set the appraisal right price 10% higher than before, at 9,356 won.
Woori Financial plans to complete the stock exchange on the 11th of next month after an extraordinary shareholders meeting on the 24th, and then finish the delisting of Tongyang Life Insurance by issuing new shares at the end of the same month. The company is moving quickly to complete the integration on schedule, including by raising the appraisal right price.
Tongyang Life Insurance's minority shareholders plan to file for an injunction after the shareholders meeting on the 24th of this month to block the new share issuance being pursued by Woori Financial. About 20 minority shareholders of Tongyang Life Insurance have reportedly contacted law firms and are finalizing the content of an injunction application to be submitted to the court. They plan to convey to the court their claim that the method for calculating the appraisal right price and Woori Financial's process of making Tongyang Life Insurance a subsidiary are working to the disadvantage of minority shareholders.