Why paid-in raise draws heat? / KBS 2025.05.20. скачать в хорошем качестве

Why paid-in raise draws heat? / KBS 2025.05.20.

[Anchor] The stock price of Hanwha Aerospace, a defense industry company, has increased more than 14 times compared to three years ago. It is likely one of the most favorable listed companies these days. However, there has been a recent setback. When it announced the largest capital increase in history, shareholders protested, and financial authorities repeatedly intervened. Ultimately, after three attempts, a capital increase of 2.3 trillion won will be confirmed next week. Even such a 'leading stock' is causing significant controversy, as paid-in capital increases are treated like a 'public enemy' in the country. It is a normal method to receive more investment from shareholders to grow the business, so why is it receiving such cold treatment? Reporters Park Chan and Hwang Hyun-kyu will sequentially address the issues surrounding paid-in capital increases and convertible bonds, which often become minefields. [Report] Chabio Tech, a cell therapy development company. A group of individual shareholders has been protesting alone for two years. The decline in stock prices was the trigger, but the change in the capital increase plan added fuel to the fire. [Former CEO of Chabio Tech/Dec. 2023/Voice Altered: "We have created a structure to conduct R&D independently with cash earned from our business in just four years...."] They said they would not conduct a capital increase for R&D, but at the end of last year, the company announced a capital increase of around 200 billion won for R&D and subsidiary investments. The Financial Supervisory Service intervened, stating that the purpose was unclear, and despite revising the securities registration statement six times, they did not withdraw the capital increase. After the announcement of the capital increase, the stock price fell by nearly 30%. A capital increase is the act of issuing new shares and selling them to shareholders, among others, for money. Since they received 'more' investment from shareholders, if the business does well, they should return 'more' to the shareholders, but what is actually happening? We analyzed over 2,700 domestic listed companies. In the past five years, there have been 22 companies that have conducted capital increases more than four times. The record for the most is held by three companies that have conducted capital increases nine times. Among the top companies are large corporations, with CJ CGV and Jeju Air each conducting four capital increases. This means they did it almost once a year. However, there has been no shareholder return through dividends or stock buybacks. They claim it was unavoidable due to lack of profits. [Lee Chang-min/Professor, Hanyang University Business School: "Management thinks that borrowing more money from shareholders has almost no cost. Paying interest is originally nonexistent, so if they don't pay dividends, there is no regular outgoing money."] Since 2002, the KOSPI has tripled. In contrast, the market capitalization has increased sixfold. As new shares are continuously issued through capital increases, the market capitalization rises, but the gap between the stock price index and the market capitalization widens. On the other hand, the U.S. Nasdaq is completely different. As the market capitalization rises, the stock price index also increases. It is a paradox that while companies are wealthy, shareholders are poor. The rampant issuance of capital increases is at the center of this issue. This is KBS News, Park Chan. [Report] Even more concerning than paid-in capital increases is 'convertible bonds.' Initially a bond, it can later be converted into stock, making it a special type of bond. Medical device company Sejong Medical was suspended from trading on the KOSDAQ last March. This was due to the company having accumulated losses exceeding 90 billion won with a capital of 5.5 billion won. Three months after the trading suspension, the company issued convertible bonds to raise funds. They intended to repay existing convertible bonds with new convertible bonds, but the 'price' for converting the bonds into stock was outrageous. The existing convertible bonds had a conversion condition of 2,344 won per share, while the new convertible bonds were set at 100 won per share. The amount of investment the company received remained the same, but the number of shares they had to issue increased by 23 times. [Shareholder of Sejong Medical: "(Convertible bonds) have been issued many times, and the amount itself was very large. Now (my stake) has been so diluted."] 'Sejong Medical' has issued convertible bonds nine times in the past three years. This is the third highest among KOSDAQ listed companies. Due to the frequent issuance of convertible bonds, the number of shares for these companies has increased by more than 100% in some cases. As a result, existing shareholders have suffered losses without any dividends. Convertible bonds are easier to issu