Investors are up in arms against Hanwha and Doosan, after the two business groups recently announced their plans to reorganize their corporate governance structures, according to industry officials, Friday.
Their protest resulted mainly from concerns over the possibility that the proposed restructurings may cause financial damage to minority shareholders of Hanwha and Doosan affiliates.
On Thursday, the Korean Corporate Governance Forum (KCGF) denounced Hanwha Energy’s plan to spend 180 billion won ($130 million) from July 5 to 24 to acquire an 8 percent stake in Hanwha Corp., the group’s de facto holding firm, for 30,000 won per share, which is slightly higher than its current stock price. The forum consists of capital market insiders and legal experts who seek to improve corporate governance in Korean companies.
Hanwha Energy cited responsible management and improvement in shareholder value as the reasons for its tender offer.
However, its move is interpreted as an attempt to enable Hanwha Group Chairman Kim Seung-youn’s three sons to exercise bigger influence over the conglomerate’s affiliates, because the heirs hold the entire stake in Hanwha Energy.
Once Hanwha Energy succeeds in the acquisition deal, the company will be Hanwha Corp.’s second-largest shareholder with 17.7 percent stake, following the Hanwha chairman, who holds a 23 percent stake. The chairman’s oldest son 추천 also owns a 5 percent stake in Hanwha Corp. at this moment, while his two younger brothers each have a 2 percent stake.
“The controlling shareholders are trying to buy shares from minority shareholders for an extremely low price,” KCGF Chairman Lee Nam-woo said in a statement.
“It is unfair and does not live up to the company’s motto, ‘responsible management.’”
Hanwha claimed that the acquisition has been conducted in compliance with laws.
“There is no risk of infringing upon the interest of minority shareholders,” the conglomerate said.