Halo Microelectronics International Corporation (Halo), the largest shareholder of the system semiconductor design specialist Zinitix (33.48% equity), claimed on the 19th that the reason for convening an extraordinary shareholders' meeting and presenting a motion to dismiss Zinitix's current management is due to indications of critical technology leakage.
Halo noted in a statement that despite the current board of directors and executives of Zinitix being dispatched from Halo, they have continued to make unilateral decisions that are detrimental to Zinitix's corporate governance and management.
Halo explained that executives violated their non-compete obligations. Halo stated, "Nam In-kyun, a non-executive director of Zinitix, founded a separate entity called Elevation Micro without prior notification or approval and initiated competitive business through this entity," adding, "Kwon Seok-man, the CEO of Zinitix, was appointed while concurrently serving as the CEO of the Korean branch of Elevation Semiconductor, and he continues to hold this concurrent position without board approval."
In particular, Halo's assertion is that there are indications that these individuals unlawfully leaked product specifications, circuit designs, and core technologies of the new product 'HM5600' that Halo was developing to their own company, Elevation Micro.
Halo stated, "It has been determined that they have continuously contacted OSAT (outsourced semiconductor assembly and test) companies that were collaborating with Halo using an Elevation Micro email instead of the official Halo account, pushing forward the project named 'EL5600,' which only changed the product name." They further commented, "A clear case of technology leakage and infringement on business operations that seriously undermined the interests of Zinitix's shareholders and the competitive edge of the company has occurred by members of the board or executives of the company."
Halo also mentioned that there are indications such as ▲ Elevation Micro posted and advertised products identical in specifications to Zinitix's core product 'Haptic Motor Driver IC' as if they were their own developed products on their official website, and ▲ instances of unauthorized removal and use of experimental equipment lent to Zinitix by Halo.
Halo evaluated that the repeated amendments to the capital increase plan by the current management after deciding to convene the extraordinary shareholders' meeting, increasing the scale of new stock issuance, was an attempt to lower Halo's equity ratio below the required threshold for special resolutions.
Halo stated, "Through the extraordinary shareholders' meeting scheduled for July 9, we aim to restore the governance structure that has collapsed due to the repeated illegal activities of the current management and fundamentally normalize Zinitix's corporate value." They added, "We hope that the current management will recognize their responsibility for the illegal activities such as violations of non-compete obligations, technology leakage, and asset misappropriation and will immediately cease any further actions that could harm shareholder value or cause organizational turmoil."