Conflict over Humasis’s management control is deepening between CEO Cha Jeong-hak and the company’s minority shareholders.
However, the company’s share prices have sharply risen ahead of the extraordinary shareholders meeting scheduled for February to discuss the participation in management by the union of minority shareholders,
Last Thursday, Hamasis announced the convening of the extra shareholder meeting in a public notice. The upcoming meeting will be held at the company’s plant in Gunpo, south of Seoul, on Feb. 28. Minority shareholders proposed the extra assembly on Oct. 18
The participants will likely discuss changes in articles of association and the election of board directors and standing auditors, as small shareholders demanded.
“However, the company plans to table additional agenda items decided at its board of directors,” a company official said. “The agenda items proposed by the management have yet to be finalized. We will fix and announce them before formally announcing the gathering of the extra shareholders’ meeting.”
Despite the escalating conflict, Humasis stocks jumped a day after issuing the public notice. Share prices ended Friday’s trading at 18,400 won ($14.15), up 1,550 won (8.88 percent) from the previous day’s 16,900 won. The share price shot to 19,500 won in mid-day trading.
Analysts attributed the price rise to increasing the market’s attention as the fight over management control rose to the surface. In the course of the conflict, CEO Cha and the small shareholders’ union are likely to buy shares at higher prices to secure a larger equity stake, they noted.
Humasis stocks had plunged with the waning spread of Covid-19, throwing the company into internal trouble. Then, in October, some minority shareholders secured a 5.45 percent equity stake (1.86 million shares), igniting the management fight. CEO Cha and his family hold less than 8 percent of equity stakes.
In the midst of this, Humasis acquired its shares from Korea Investment & Securities with the termination of the 20 billion won treasury stock acquisition trust contract on Nov. 25. The acquisition volume reached 1,456,252 shares, accounting for 5.54 percent of the total issued shares.
Humasis recorded sales of 25.2 billion won and an operating loss of 9.09 billion won in the third quarter. The company explained that it had pushed to diversify into blood sugar diagnosis, molecular diagnosis, biochemical diagnosis, and remote diagnosis after the Covid-19 pandemic weakened to an endemic.
Analysts watch whether and how the company, which had grown sharply through Covid-19, will overcome the upcoming fight over management control.