[Alpha Biz= Reporter Kim Sangjin] HL Holdings, the business holding company of HL Group, is facing criticism from the financial investment community over its decision to donate approximately 4.6% of its total shares (470,193 treasury shares) to a non-profit foundation. The move, approved at the board meeting on November 11, has sparked concerns that it could damage shareholder value.
According to a filing with the Financial Supervisory Service's electronic disclosure system, the donation is valued at 16.3 billion KRW based on the stock price on November 8, the day before the board resolution. Critics argue that donating treasury shares, which were bought back using company funds, to a foundation, could allow the voting rights of those shares to be revived. This would potentially increase the influence of the largest shareholder, Chairman Jeong Mong-won, raising suspicions that it is a strategic move to enhance his control.
VIP Asset Management, which owns 10.41% of HL Holdings' shares and is the second-largest shareholder, publicly criticized the decision. The controversy is further amplified as the donated shares represent 83.8% of the treasury shares HL Holdings had bought back between 2020 and 2021, specifically for the purpose of increasing shareholder value.
The Korea Corporate Governance Forum also released a statement condemning HL Holdings' actions, claiming that the donation of treasury shares is primarily aimed at strengthening the largest shareholder’s control.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
