[비즈한국] When Hanwha Solutions009830 held a meeting to appease shareholders angered by its surprise announcement of a large-scale capital increase, it claimed that it had "prior communication with the Financial Supervisory Service (FSS)." The FSS immediately issued a direct rebuttal, stating that "there was no prior consultation or approval." The FSS has demanded that the company immediately explain the circumstances behind the statement.
According to the securities industry on the 3rd, Hanwha Solutions held a 'minority shareholder meeting' that afternoon at the Korea Investment & Securities headquarters in Yeouido, Seoul, to explain the background of its 2.4 trillion won shareholder-allotted capital increase and its future business strategy.
At the meeting, Jung Won-young, Chief Financial Officer (CFO) of Hanwha Solutions, addressed shareholders' protests over the surprise capital increase by stating, "We told the FSS about the capital increase plan beforehand," and "We communicate with them even before submitting the securities registration statement." This was interpreted as a claim that there were no procedural issues because there had been prior communication with the authorities.
However, immediately after the statement was reported, the FSS issued a clarification, completely denying Hanwha Solutions' claim. The FSS stated, "There was no prior consultation or approval regarding Hanwha Solutions' capital increase," adding, "The review of a securities registration statement is conducted according to strict legal procedures after the statement is submitted; there is absolutely no case of coordinating or approving content in advance."
The FSS subsequently demanded that Hanwha Solutions immediately explain the circumstances, purpose, and facts behind the remark. The FSS stated, "We plan to review necessary measures based on the results of the explanation." It added, "We recognize the gravity of this large-scale capital increase and are conducting a thorough review of the securities registration statement to protect investors."
In response, Hanwha Solutions issued an official statement on the 4th, admitting that the remark was inaccurate and offering an apology. The company explained that the official had misspoken while trying to explain that they had verbally informed the FSS of their intention to submit the securities registration statement, adding, "This caused a misunderstanding as if we had discussed and sought understanding for the capital increase plan with the FSS in advance. This was an individual's mistake and not the company's position."
The company further clarified, "The company has not had any prior consultation regarding the content of the report or sought understanding for the capital increase, other than informing the FSS of the scheduled submission of the securities registration statement." They also apologized to shareholders for the confusion caused by the inaccurate statement. They emphasized, "We apologize to the FSS officials who were subject to the misunderstanding regarding 'prior communication,'" and added, "We take this error very seriously and will be more cautious in our communication with shareholders going forward."
Previously, on the 26th of last month, Hanwha Solutions announced a capital increase of 2.3976 trillion won. The plan is to use 1.5 trillion won of the funds to repay debt and 900,000 won for solar energy business investment. However, since the number of newly issued shares accounts for 42% of existing shares and a significant portion of the funds is intended for 'debt repayment,' the stock price plummeted 18.22% on the day of the announcement.
Collective action by shareholders is also intensifying. Minority shareholders have completed requests to view and copy the shareholder registry via the platform 'ACT' and have begun securing a 10% stake to oppose the capital increase. The number of shareholders united through ACT has exceeded 2,500. Political circles have also criticized the move, stating, "This is management that evaporates the assets of retail investors," and "The practice of trying to overcome management failure at the expense of shareholders must not be repeated."
As the controversy spread, Hanwha Solutions introduced a measure involving executive stock purchases. Executives, including Vice Chairman Kim Dong-kwan, announced that they would purchase 4.2 billion won worth of company stock, and all outside directors also pledged to participate. CFO Jung emphasized at the meeting, "There is no plan for additional capital increases at least until 2030," and "It was an inevitable decision to improve our financial structure, as the risk of a credit rating downgrade increases if we do not proceed with the capital increase within the first half of the year."
The FSS has classified this capital increase as an issue of concern regarding the dilution of shareholder value and is conducting an intensive review. If it is determined that the purpose of the capital increase or the process of communicating with shareholders was not sufficiently disclosed, the FSS may demand the submission of an amended registration statement.