[비즈한국] Conflict between Huons Group and its shareholders is escalating over the absorption merger plan for its non-listed subsidiary, Huons Lab. While the company argues that the merger is an unavoidable step to secure R&D funding for Huons Lab, which is currently facing capital erosion, some shareholders are voicing strong opposition to the merger itself, citing concerns over the valuation of Huons Lab.
An extraordinary general meeting of shareholders is scheduled for July 3 to deliberate on the merger, and observers expect a fierce proxy battle, particularly driven by ACT, an online platform for minority shareholders.
The Huons Global shareholder meeting held at Pangyo I-Square on the 4th turned into a scene of intense protest, with individual shareholders expressing anger over the company's unilateral merger plan and the recent stock price crash. Around 20 individual shareholders, including ACT CEO Lee Sang-mok, attended the meeting and engaged in a sharp confrontation with the management.
If there's a 90% chance of technology transfer, why merge now?
The point on which shareholders focused most intensely during the meeting was the reality of the technology transfer and the timing of the merger. Shareholders find it difficult to accept why the company is pushing for a sudden merger when the value of the technology the management has emphasized has yet to materialize into actual contracts. In particular, some shareholders questioned why no specific contract or progress has been announced, despite the company previously claiming a 90% chance of completing the technology transfer.
Regarding his previous statement about the 90% probability, Song Soo-young, CEO of Huons Global and Huons, stated, "That was not a guaranteed figure for a specific contract, but an expert analysis result calculated by external professional institutions, such as accounting firms, by comprehensively assessing market conditions and core technologies at the time." He added, "We are currently in the term sheet stage with two global companies and are in detailed discussions.">
He promised, "I take the anxiety felt by shareholders due to the delay in announcing concrete results very seriously. I will ensure that future progress is shared more transparently and concretely, and we will strengthen communication to resolve the lack of transparency that shareholders are concerned about regarding the merger and technology transfer process."
Merger instead of external investment? Company dismisses growing succession rumors as "groundless"
Shareholders also attacked the sincerity of the merger itself, questioning whether there are hidden motives behind choosing an internal merger rather than seeking external investment. Some in the market have even raised suspicions that this merger is not just for the group's survival but a ploy to facilitate management succession.
In response, CEO Song drew a line, stating, "There were never any discussions about attracting independent investment from venture capital (VC) firms, and there were practically no ways to secure external funding.">
He also strongly denied claims that the merger is being used as a tool for succession by the owner family, including Huons Global Chairman Yoon Sung-tae. "I stake my position as CEO on the fact that the suspicion of using the merger for succession purposes is groundless," he explained. "Currently, Huons Lab is in a state of severe capital erosion, making independent survival or external financing realistically impossible. We are pushing for the merger with Huons as the only viable alternative to commercialize its SC (subcutaneous) injection platform technology.">
Why Huons for the merger? ... "Equipped with production and sales infrastructure"
Issues were also raised regarding why the entity absorbing Huons Lab is Huons, not Huons Global. Some Huons Global shareholders are resentful that shareholders of the holding company, Huons Global, might not reap the benefits of the merger if the value of Huons Lab is transferred to Huons. Doubts were also raised about whether the merger between Huons and Huons Lab is being used as a means to bypass financial authorities' regulations on "split-off" listings (double listings).
In response, CEO Song emphasized Huons' production and sales infrastructure to explain the legitimacy of the merger. He stated, "The holding company, Huons Global, is merely a company that handles management and governance; it lacks the infrastructure to actually produce or sell products. On the other hand, Huons already possesses domestic and international production facilities and a robust sales network, making its infrastructure essential for the rapid commercialization of 'Hy-Diffuse,' the core technology of Huons Lab.">
Concluding the meeting, CEO Song said, "I will ensure that the will of all shareholders, including minority shareholders, is reflected in management without distortion. I clearly promise that we will continue to listen to our shareholders and consistently seek transparent management and various ways to enhance shareholder value.">
However, despite the meeting, shareholders present at the scene remain unconvinced, stating that the company's explanations were mere excuses repeating its previous position and insufficient to resolve their distrust. A shareholder in their 30s remarked, "The management's answers at today's meeting sounded like nothing more than an evasion of responsibility for the stock price crash and platitudinous excuses, which only increased the frustration of the shareholders. If the company continues to ignore the legitimate voices of minority shareholders and pushes for the merger, we will actively consider all legally available countermeasures, including filing for an injunction to access and copy the shareholder register.">