It has been confirmed that an individual who was under investigation for past uncapitalized mergers and acquisitions (M&A) and embezzlement is currently an executive at one of the investment firms that purchased Sangji Construction's convertible bonds (CB) and exercised the conversion rights.
According to the Financial Supervisory Service's electronic disclosure system on the 8th, Sangji Construction sold 2.4 million shares of CB to four investment firms for 13.5 billion won on the 4th of last month. This accounts for 60.3% of the current issued shares, which total 3,981,814, and when calculated at a stock price of 34,100 won (the closing price on May 7), amounts to approximately 81.8 billion won. The investment firms exercised the conversion rights for their CBs, and new shares will be released in the market on the 22nd of this month.
Since Sangji Construction has been incorporated as a theme stock for Lee Jae-myung, the stock price has surged, and it is anticipated that CB investors will see considerable profits. They acquired the CB at 6,375 won per share, and the conversion price is 5,000 won per share. Considering the current stock price of 34,100 won, the investment firms that invested in the CB could achieve profits exceeding fivefold.
According to the report on the 'self-conversion bond sale decision' disclosed by Sangji Construction at the time of the CB sale, the name of Mr. Wi can be found registered as an inside director, separate from the two largest shareholders listed in company A, one of the four investment firms that purchased the CB.
Mr. Wi, a former executive at a talent agency, became known to the public when he married a female entertainer. The marriage ended after three years. It was due to issues such as Mr. Wi making contracts with the talent agency without his wife's consent or using his wife's name to guarantee loans which caused problems. His wife filed a lawsuit against him, and ultimately, the couple parted ways.
Mr. Wi's name reappears in another incident. Mr. Wi and his group allegedly deployed loan sharks to uncapitalized merge and acquire Digitec Systems, then used company funds to repay loans and embezzled a portion, leading to his arrest in 2014. This case involved activities known as 'corporate raiding' that resulted in driving a company to bankruptcy.
Digitec Systems was a solid company that at one time supplied touch screens to Samsung Electronics, achieving annual revenues of 200 billion won and net profits exceeding 10 billion won. However, following this incident, it went through delisting and bankruptcy proceedings. Those involved in the case included a fund manager who participated in stock manipulation and a deputy director at the Financial Supervisory Service who accepted bribes to cover up accounting audits. However, it remains unconfirmed the extent of Mr. Wi's involvement in the incident.
Mr. Wi has now appeared as an acquirer of Sangji Construction's CB. Individuals in the investment sector who remember Mr. Wi's past are casting doubtful glances. Despite Sangji Construction's urgent need for liquidity, questions are being raised as to why it was necessary to sell CB to an investment firm associated with Mr. Wi. The reasons for the CB purchase contract have not been disclosed.
A representative from Sangji Construction stated, 'The person in charge is currently unavailable, so we cannot respond to related inquiries.' Neither Sangji Construction nor company A could connect with the representative.
Sangji Construction's stock price fluctuated as the early presidential election political landscape began. It has been reported that former outside director Lim Mu-young of Sangji Construction has joined the campaign for Lee Jae-myung, linking the company to the theme stock of Lee Jae-myung.
Sangji Construction is adeptly leveraging the recent surge in stock prices. This includes the resolution for a large-scale shareholder-allocation paid-in capital increase. However, it appears that most existing shareholders believe the current stock price surge is temporary, as the competition rate for the shareholder-allocation paid-in capital increase remained at 5.85%, failing to draw significant interest. On the first day of general subscription for public offering on the 7th, only seven investors participated.