Minority shareholders united to oust the founder and became the largest shareholder of the company. This is the case of Amicogen, a biotechnology material corporation listed on the Korea Securities Dealers Automated Quotations. These minority shareholders raised issues regarding poor performance and unnecessary fund management by former chairman Shin Yong-cheol, ultimately forming a coalition to remove Shin and becoming the largest shareholder. These minority shareholders stated their plan to normalize the company by reorganizing the subsidiaries that the former chairman unnecessarily created and focusing on the core business.
The concern is whether the minority shareholders can properly manage the company until a new owner appears. This is because the role of the largest shareholder, which is essential for making important decisions, may be limited. Currently, the company is led by So Ji-sung, the general vice president and representative of the Shareholder Coalition, along with the existing management team, including Byo Jjeo (Korean name Park Cheol), the CEO of Amicogen, Yoon Young-cheol, the head of production, and Kim Jun-ho, who was newly appointed as an internal director in February.
The Shareholder Coalition noted that if the business stabilizes, their goal is to attract a strategic investor (SI) to lead the corporations well or to find a new owner internally.
Amicogen announced on the 18th that the largest shareholder changed from former chairman Shin Yong-cheol with an equity holding of 3.69% to Magapartners Investment Association (5.01%). This investment association was formed by 83 minority shareholders of Amicogen, with So Ji-sung serving as the representative member.
The Shareholder Coalition raised issues about the company's management when So represented a joint ownership agreement disclosing an equity holding of 10.06% in December last year. Amicogen has reported losses for three consecutive years from 2022 to last year. After acquiring the biotechnology material company Bifido for 60 billion won in 2021, it sold it for 15 billion won last year, resulting in hundreds of millions of won in investment losses. The Shareholder Coalition criticized that the former chairman's reckless investments in new businesses have worsened the company's financial structure.
The voices of the united minority shareholders have begun to have a direct impact on management. At the extraordinary general meeting held in February, former chairman Shin Yong-cheol was dismissed, and So Ji-sung was appointed as an internal director. The existing management team, including Byo Jjeo, who has been active with the minority shareholders, also sided with the Shareholder Coalition.
The executives have expressed their opposition and supported the Shareholder Coalition after former chairman Shin announced that he would recruit the electric vehicle battery company Kwangmu and Plutos (formerly Leaders Technology Investment) as an SI and step away from management.
Former chairman Shin's equity was over 13% until January this year, but it has steadily decreased to the 3% range due to sales following his dismissal. If a listed company has no largest shareholder, fundraising through issuing convertible bonds (CB) becomes relatively difficult, and scrutiny from the exchange and financial authorities becomes stringent. The Shareholder Coalition stated that they expressed their intention to buy approximately 2 million shares still held by former chairman Shin, but he rejected the offer.
So Ji-sung stated, 'In a situation where there is a high risk of losing the largest shareholder, we established a coalition because we could not become the largest shareholder through the joint ownership. There is a one-year lock-up period and tax issues like capital gains tax, so (in terms of investment) it is a loss, but the shareholders united to save the company.'
The coalition plans to maintain the largest shareholder position until the company's management is normalized and to attract an SI in a transparent manner or to find a new owner internally.
Currently, the Shareholder Coalition and management plan to reorganize unnecessary subsidiaries such as Autobulin Therapeutics, Labmaster, and Lopi Bio, and concentrate on the core business. Amicogen has localized media that it relied on for more than 90% of its revenue. The Shareholder Coalition has stated that they will focus on the media and resin sectors, which are essential materials for the production of biopharmaceuticals, as a new growth driver. Recently, it sold its subsidiary Amicogen China for approximately 54 billion won and plans to use the funds for business.
There are still traces of former chairman Shin in the subsidiaries, so efforts are needed to erase them. In the case of FurioGen, the former chairman's name is still listed as the CEO. So Ji-sung mentioned, 'We plan to address the issue regarding the former chairman in the subsidiaries, including his dismissal as CEO.'
So Ji-sung emphasized that his role is closer to a Chief Shareholder Engagement Officer (CSEO). The CSEO position, which has begun to emerge recently among listed companies in Japan, is considered a typical means of enhancing management transparency through communication with shareholders. So Ji-sung stated, 'We are communicating effectively with the company's executives, and everyone is working hard for the company's growth,' adding, 'We strive to make the company a place where both employees and shareholders thrive.'