Legal Battle Over Capital Increase

On January 8, Tubuki Investment LLC took legal action against Hyundai Motor Securities' CEO, Bae Hyung-geun, by filing an injunction lawsuit at the Seoul Southern District Court. This move aims to block the issuance of 30,124,082 new common shares, a decision announced by Hyundai Motor Securities on November 27 last year as part of a 200 billion won shareholder-allocated capital increase plan.

Concerns Over Shareholder Rights

The capital increase strategy, intended to secure funds for growth engines and repay short-term borrowings, has raised concerns among minority shareholders. Tubuki Investment, represented by Chun Jun-beom from the Korea Corporate Governance Forum, fears the new shares could dilute the value of existing shares and negatively impact shareholder rights.

Regulatory Oversight and Future Steps

Following intervention by the Financial Supervisory Service (FSS), Hyundai Motor Securities submitted a revised securities report, which was approved to take effect on January 10, 2025. The first hearing on the injunction is set for January 15, with the issue price for the capital increase to be confirmed on February 21. Subscription periods for existing and public shareholders are scheduled for late February and early March, respectively.

Strategic Financial Moves

Hyundai Motor Securities' capital increase is aimed at enhancing capital soundness by repaying 77.5 billion won of redeemable convertible preferred stock and 22.5 billion won of commercial paper issued in 2019. However, this strategy has sparked a debate on the potential dilution of shares and its effects on minority shareholders' investments.