Hurdle Still Remains
As SK Securities Co. received South Korean private equity fund (PEF) firm J&W Partners as a new owner, all eyes are on whether J&W Partners will be able to become a major shareholder in the future.
According to investment banking (IB) industry sources on March 7, J&W Partners plans to ask the Financial Services Commission (FSC) to grant approval to become a major shareholder of SK Securities soon.
Previously, SK decided to sell its entire 10 percent stake in SK Securities to J&W Partners for 51.5 billion won (US$48.15 million). SK signed an agreement with a consortium led by Cape Investment & Securities last year to sell its stake in SK Securities for 60.8 billion won (US$56.85 million) but the company changed a buyer after there was a delay in approval for the eligibility of a major shareholder from the financial authorities. J&W Partners is a new PEF company that was co-founded by Jang Uk-je, who worked for Jabez Partners, and American Christopher Wang in 2015. It participated in an open bidding for SK Securities last year.
The problem in the future is the financial authorities’ screening for the change of shareholder. When J&W Partners asks the FSC to review the eligibility of major shareholder, the FSC makes a final decision on whether to grant approval after submitting to the Securities & Futures Commission. The IB industry believes that J&W Partners will be able to acquire SK Securities unless there are special reasons such as the requirement of shareholder and history of restrictions in the past.
The major shareholder qualification review will be proceeded according to according to the Act on Corporate Governance of Financial Institution. Under the current law, the largest investor among largest shareholders must not have violated the Monopoly Regulation and Fair Trade Act., the Tax Evaders Punishment Act and other financial laws. However, the fact that co-CEOs Jang Uk-je and Christopher Wang received penalty from the Financial Supervisory Service (FSS) in the acquisition process of MG Non-Life Insurance Co. while they were working at Jabez Partners can be a decisive variable.