DB HiTek's minority shareholders have made a significant move by petitioning Korea's Financial Supervisory Service (FSS).
They are asking the regulator to force the sale of 'hidden' friendly stakes tied to the company's founder, Kim Jun-ki. This isn't just a random complaint; it's a calculated step in a broader battle for better corporate governance, timed perfectly ahead of the annual general meeting (AGM) on March 24th.
So, why is this happening now? The story has a clear causal chain. First, the most important trigger was the Korea Fair Trade Commission's (KFTC) decision in February to refer the DB Group founder to prosecutors. The charge was that he had concealed affiliates for over a decade. This official action gave shareholders a powerful legal argument: if the government itself says these affiliates were hidden, then their voting rights should be questioned.
Second, the shareholders have learned from past experiences. In the 2025 AGM, a proposal to protect minority shareholders received only 18% of the vote and failed. This taught them that trying to win on the AGM floor is difficult against a consolidated block of friendly votes. As a result, they've shifted their strategy to using regulatory and legal channels, like this FSS petition, which proved more effective in a similar 2024 legal action.
Third, the company is performing well, targeting revenue of KRW 1.5 trillion in 2026. This solid financial performance makes the low valuation—often attributed to the 'Korea Discount'—even more frustrating for investors. The discount refers to the tendency for South Korean companies to be valued lower than their global peers due to issues like weak corporate governance and low shareholder returns. By challenging the founder's control through friendly stakes, shareholders aim to close this valuation gap.
Ultimately, this petition is a direct challenge to the voting power of what shareholders see as disguised allies. Their immediate goal is to gain support for appointing a court-approved inspector to investigate transactions with these affiliates. It's a classic case of shareholder activism leveraging regulatory momentum to push for transparency and unlock value trapped by governance issues.
- Korea Discount: A term describing the persistent undervaluation of South Korean companies compared to their international counterparts. This is often blamed on factors such as complex ownership structures dominated by founding families (chaebols), low dividend payouts, and weak corporate governance.
- Friendly Stakes: Shares held by individuals or companies that are expected to vote in line with the current management or controlling shareholders. In this case, they are alleged to be 'hidden' affiliates secretly controlled by the founder.
- FSS (Financial Supervisory Service): South Korea's primary financial regulator, responsible for supervising and examining financial institutions.