Oscotec to Hold Extraordinary Shareholders’ Meeting on the 30th of Next Month; Largest Shareholder Alliance Seeks Board Entry

[Financial News] Oscotec will hold an extraordinary shareholders’ meeting on the 30th of next month. The meeting, called at the request of Kim Seong-yeon, the largest shareholder and a Genosco director, who joined forces with allied shareholders, will consider abolishing the supermajority voting requirement and appointing new directors. Following last year’s controversy over the dual listing of its subsidiary Genosco, a dispute over control appears to be flaring up again.
Kim has agreed with second-largest shareholder GK Asset and specially related parties Lee Gi-yun, Lee Hyo-jin and Lee Sang-ho to jointly exercise voting rights representing a 22.25% stake.

The largest shareholder alliance has recommended three director candidates: one inside director, one other non-executive director and one independent director. The inside director nominee is Ko Jong-seong, CEO of Genosco, which is headquartered in Boston, U.S.; the nominee for other non-executive director is Kim Seong-yeon, a director in charge of strategy at Genosco.
Ko oversees Genosco’s research and development (R&D). An inside director works at the company, oversees business operations and has the legal authority to participate in major decisions.
Some in the industry say that if Ko becomes an inside director at Oscotec, it could raise issues involving the duty of loyalty and corporate governance. They warn that business opportunities arising from Oscotec’s R&D could be transferred to Genosco, or that ownership of intellectual property, a key asset, could become unclear. This could lead to questions over whether decisions made in his capacity as an inside director violate the duty of loyalty under the Commercial Act.
Internal controls are also at issue. A subsidiary is subject to oversight by its parent company’s board, but if the subsidiary’s CEO also serves as a director of the parent company, the overseen and overseeing parties become one and the same. Critics say this could make it difficult for Oscotec to objectively assess Genosco’s business performance or the efficiency of its R&D investments.

Genosco’s KOSDAQ listing fell through last year after opposition from Oscotec shareholders. Oscotec has since been pursuing a plan to make Genosco a wholly owned subsidiary. It is seeking strategic investors (SIs) or financial investors (FIs) to secure the remaining approximately 40% stake.
Last September, Oscotec’s board formed a special committee to oversee the incorporation of Genosco as a wholly owned subsidiary. The committee is chaired by independent director Kim Gyu-sik, who has engaged in shareholder activism. An Oscotec representative said, “Along with forming the special committee, we have begun follow-up reviews and plan to consider, in turn, the criteria and procedures for selecting an external valuation firm.”
Some say that if a key Genosco figure joins Oscotec’s board while Genosco is being valued, the special committee’s fairness and independence could come under scrutiny.

An industry source said, “Although directors with conflicts of interest are legally barred from voting on the relevant matter, the structure allows them to steer decisions in the subsidiary’s favor through informal influence and access to information, even without casting a vote.” 


[email protected] Jeong Myeong-jin, Medical Affairs Reporter Reporter