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Liquidation value of 19 million won? The inside story behind the liquidation of SM affiliate Hans Chemical Asset just 9 months after establishment

[비즈한국] It has been confirmed that Hans Chemical Asset, an affiliate of SM Group, has decided to undergo liquidation. However, it was discovered that a company called DK Tree Partners acquired a 50% stake in Hans Chemical Asset the day before the decision to liquidate was made. DK Tree Partners is expected to receive 50% of Hans Chemical Asset’s remaining assets.

Hans Chemical, an affiliate of SM Group, launched "Hans Chemical Asset" last December as a spin-off of its moisture-absorbent polypropylene (PP) film business division. Hans Chemical Asset was later incorporated as a subsidiary of HN E&C after several governance restructuring processes. HN E&C is a company 100% owned by Woo Ji-young, the second daughter of SM Group Chairman Woo Oh-hyun and former CEO of HN E&C. The governance structure follows the line of "Former CEO Woo Ji-young → HN E&C → Hans Chemical Asset."

On September 4, HN E&C sold 50% of its 100% stake in Hans Chemical Asset to DK Tree Partners. According to the corporate registry, DK Tree Partners is a management consulting firm established on August 21 of this year.

DK Tree Partners is not officially classified as an SM Group affiliate. However, the board of directors of DK Tree Partners is composed of personnel from SM Group, which indicates a close relationship between the two. At the time of its establishment, DK Tree Partners appointed Park Dong-kwang, former auditor of SM Bexel 004440, as CEO, and Lee In-gu, CEO of Hans Intech and CEO of Hans Chemical Asset, as auditor. Hans Intech is a subsidiary of HN E&C. CEO Lee In-gu resigned from his position as auditor of DK Tree Partners on August 28, just one week after its establishment.

By selling the stake, HN E&C and DK Tree Partners each came to hold a 50% stake in Hans Chemical Asset. However, on September 5, the day after the transaction, Hans Chemical Asset suddenly held a general shareholders' meeting and resolved to dissolve the corporation. Hans Chemical Asset intends to proceed with the liquidation process after appointing a liquidator.

The liquidator is responsible for repaying Hans Chemical Asset’s debts and distributing the remaining assets to shareholders. Consequently, the remaining assets of Hans Chemical Asset will be split equally between HN E&C and DK Tree Partners. This means that DK Tree Partners will walk away with assets without having performed any special activities immediately after acquiring the stake.

According to the Financial Supervisory Service's electronic disclosures, Hans Chemical Asset had total assets of 19 million won and 0 won in debt as of the end of last year. If there were no significant changes to the company’s finances this year, DK Tree Partners is expected to receive approximately 9.5 million won. DK Tree Partners acquired its 50% stake in Hans Chemical Asset for 5 million won, effectively netting a profit of about 4.5 million won through the company's liquidation.

Looking at the board of directors before the dissolution decision, CEO Lee In-gu served as the CEO, while former CEO Woo Ji-young and her husband, Park Heung-jun, CEO of SM Steel, served as executive directors. After the decision to dissolve, Woo Ji-young and Park Heung-jun stepped down as executive directors. Hans Chemical Asset appointed CEO Lee In-gu as the liquidator. Under the Commercial Act, "directors become liquidators except in cases of mergers, divisions, division-mergers, or bankruptcy," so appointing CEO Lee In-gu as the liquidator is legally permissible.

Nevertheless, questions remain as to why Hans Chemical Asset is being liquidated when it has not undergone a merger or bankruptcy. At the time of the spin-off, Hans Chemical stated its plans: "We will establish a decision-making system suitable for the characteristics of the business and facilitate the construction of a reasonable performance evaluation system to solidify a responsible management system," and "By specializing business divisions, we will enable quick responses to market environments and institutional changes, and secure business competitiveness by investing heavily in core businesses."

BizHankook reached out to SM Group for comment but did not receive a response.