[Financial News] SNT Holdings announced that on the 29th, they sent a letter requesting immediate suspension and full withdrawal of a large-scale treasury stock disposal plan announced by SMAC Co. on the 26th. This request was made to SMAC, SMAC’s employee stock ownership association, and Manho Steel. They claimed the transaction is a breach of the duty of loyalty by directors and goes against the principle of shareholder equality.
SNT Holdings is the largest shareholder of SMAC, holding approximately 20.20% of its issued shares.
SMAC disclosed a sudden plan to sell treasury stock just three days before the 2025 regular shareholders’ meeting. This plan includes selling at a 5% discount to Manho Steel (at 6,498 won per share, 770,000 shares) and donating stocks to the employee stock ownership association (1 million shares, free of charge). Additionally, it plans to sell at a 20% discount to 67 members of the employee stock ownership association (at 5,196 won per share, 907,031 shares).
SNT Holdings argues that, although this treasury stock disposal is presented as employee compensation or strategic alliances, its primary aim is likely to strengthen the voting rights of existing controlling shareholders.
The company criticized SMAC for transferring key assets, such as treasury stock, at a discount or for free to friendly entities like Manho Steel and the employee stock ownership association without offering similar opportunities to general shareholders. This act clearly violates the revised Corporate Law’s requirement for directors to treat all shareholders’ interests equally.
Given that the transaction occurred just days before the implementation of stricter treasury stock disclosure regulations, SNT Holdings suspects the move was rushed to evade these regulations and intended to influence the voting structure at the upcoming shareholders’ meeting.
SNT Holdings referred to the current management dispute at Korea Zinc, highlighting that treasury stock can be misused as a tool in such disputes. They believe cancellation rather than disposal of treasury stock would be a more reasonable solution in this situation.