Suspicion of Seeking Personal Interest
A civil group asked the Fair Trade Commission (FTC) to look into allegations that SK Group acquired a stake in SK Siltron for the personal interest of Chey Tae-won.
According to the Solidarity for Economic Reform on November 8, the group sent an official letter to the FTC on the previous day to ask the FTC to investigate the case to find out whether or not the process of SK Group chairman Chey’s acquiring a 29.4% stake in SK Siltron corresponds to swindling controlling shareholders out of their personal interest.
SK Group chairman Chey allegedly took over a stake of close to 30% without showing its ownership structure clearly while the SK Group acquired SK Siltron.
SK Holdings, the holding company of the SK Group, acquired a 51% stake in SK Siltron which was a subsidiary of the LG Group by buying 34,181,410 million shares of the company in cash. Of the remaining 49 percent, 19.6 percent were acquired by SK Holdings and 29.4 percent by an SPC under a contract with the chairman Chey side. In this way, the acquisition was finalized.
The way Chey acquired the stake is based on a total revenue swap (TRS) contract that the SPC bought shares but in fact rights as shareholders belong to chairman Chey. It has been pointed out that chairman Chey used an expedient to hide acquiring and owning stocks while directly purchasing stocks expected to make a hefty profit from transaction for a low price.
The SK Group judged that the value of SK Siltron shares will nearly double in three to four years when the group acquired a stake in SK Siltron. As the remaining stake was traded at a price which was about 30% lower from the price of the first acquisition as the remaining stake was bereft of management right premiums, it was a decision for the benefit of the SK Group which already secured a controlling stake to secure as many equities as possible.
On the other hand, the SK side emphasized that they did not need to obtain the rest of the shares because they had already secured an enough stake in Siltron to control Siltron in the initial transaction. They explained that the decision to acquire the remaining stake along with chairman Chey was made in order to prepare for rival companies’ possible attempts to acquire stakes.