The conflict between CEO Cha Jeong-hak and minority shareholders over the management rights of Humasys is deepening.
However, the company’s stock price has skyrocketed ahead of the extraordinary general meeting of shareholders scheduled in February to consider participation in management by the minority shareholders’ union.
Last Thursday, Hamasis announced in a public notice the convocation of an Extraordinary General Meeting of Shareholders. The meeting will be held on February 28 at the company’s factory in Gunpo, south of Seoul. Minority shareholders proposed an additional meeting on October 18.
Participants are likely to discuss changes to the Articles of Incorporation, election of directors and full-time auditors at the request of minority shareholders.
“However, we plan to submit additional agenda items decided by the board of directors,” said a company official. “The agenda proposed by management has not yet been finalized. We will make amendments and announce them before officially announcing the holding of the additional shareholders meeting.”
Despite the escalating conflict, Humasys’ stock price soared the day after the announcement. The stock on Friday closed at 18,400 won ($14.15), up 1,550 won (8.88%) from the previous day’s 16,900 won. Shares soared to 19,500 won in intraday trading.
Analysts attributed the higher price to the market’s attention as disputes over management surfaced. In the course of the confrontation, CEO Cha and the Small Shareholders Association are likely to buy shares at higher prices to secure more shares, they noted.
Humasys stock plummeted as the spread of Covid-19 weakened, sending the company into internal trouble. Then, in October, some minority shareholders acquired a 5.45% stake in him (1.86 million shares), igniting a management battle. CEO Cha and his family own less than 8% of his stock.
On November 25th, Humasys completed its 20 billion won share buyback trust contract and acquired shares from Korea Investment & Securities. The acquisition amount reached 1,456,252 shares, accounting for 5.54% of the total number of issued shares.
Humasys recorded sales of 25.2 billion won and an operating loss of 9.09 billion won in the third quarter. The company explained that it pushed to diversify into blood glucose diagnostics, molecular diagnostics, biochemical diagnostics, and remote diagnostics after the Covid-19 pandemic weakened to endemic.
Analysts will be watching to see if and how the company, which has seen rapid growth through Covid-19, wins the battle over management going forward.
