SNT Holdings, Largest Shareholder of Smac, Proposes Meeting to Management... Will 'Dialogue' Resolve Disputes?

Proposal for Mid- and Long-Term Growth Strategy Discussions at Juchon Plant in Gimhae


Disagreements Over Access to Accounting Records and Audit Committee Appointments


Financial Burden, Investment, and Funding Plans Also on the Agenda

SNT Holdings, the largest shareholder of Smac, has proposed a direct meeting with the current management of Smac, the employee stock ownership association, and other related parties. Amid ongoing disagreements over access to accounting records and the appointment of audit committee members, the purpose is to discuss the company's growth strategy and financial issues in one place.

On September 22, SNT Holdings announced that it had sent an official registered notice to Smac's current management, including Chairman Choi Youngseop and CEO Kwon Ohyeok, as well as related parties, the employee stock ownership association, and representatives of Manho Steel, formally proposing a meeting at Smac's Juchon plant in Gimhae on September 29.

SNT Holdings, combined with SNT Motiv, is the largest shareholder, holding a 28.15% stake in Smac. The background of this proposal lies in the implementation of a court decision and the composition of the audit committee.

According to SNT Holdings, the court accepted the request for a provisional disposition to access and copy accounting books, but Smac has yet to comply. An indirect compulsory execution order has also been finalized. SNT Holdings explained that although up to 300 million won in indirect enforcement fines could be imposed at a daily rate of 10 million won, they have not yet taken any enforcement action as they are waiting for Smac to comply voluntarily.

The issue of audit committee composition remains unresolved. The revised Commercial Act, effective since September 10, expanded the number of independent audit committee members for listed companies from one to two.

SNT Holdings claimed that Smac appointed only one independent audit committee member at the last general shareholders' meeting and that on April 25 they proposed the appointment of an additional candidate, but have yet to receive a substantive response.

Management strategy and financial issues are also expected to be addressed at the meeting. According to IR materials released by Smac and analysts' reports, Smac's sales and operating profit are expected to increase from 217.9 billion won and 23.4 billion won in 2026, to 255.4 billion won and 29.9 billion won in 2027, and further to 284.3 billion won and 32.8 billion won in 2028.

However, SNT Holdings also flagged concerns about the financial burden. Smac's debt ratio rose from 158.7% at the end of 2022 to 221.5% as of the end of June this year, and total borrowings increased from 64.9 billion won to 171.4 billion won.

SNT Holdings believes that, in order to expand into new growth areas such as semiconductor equipment and if external funding is required, it will be necessary to consider not only the size and terms of capital raising but also the impact on financial stability and existing shareholder value.

An SNT Holdings official stated, "As the largest shareholder, the aim of this meeting is to open a forum for broad discussions on mid- and long-term growth strategies, investment and funding, financial stability, and enhancement of corporate and shareholder value, and to listen to each party’s opinions. We will determine our subsequent course of action based on the responses and outcomes from each party to this meeting proposal and the ensuing discussions."

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