Minority shareholders of Oscotec Inc. have been confirmed to have submitted a set of demands to the company seeking broad involvement in corporate management. The core of the proposal includes granting minority shareholders the right to nominate two directors—one inside director and one outside director—and requiring unanimous board approval for key agenda items. The proposal also includes provisions aimed at preventing former Chief Executive Officer Kim Jeong-geun from re-entering the board following his failed reappointment earlier this year.
According to the biotech industry on the 23rd, Oscotec last month received a certified letter from the Oscotec Minority Shareholders Alliance demanding amendments to the company’s articles of incorporation. The demands include: △changes to quorum requirements for the appointment and dismissal of directors, △reduction of directors’ terms from three years to two years, △introduction of new director qualification requirements, and △mandatory unanimous board approval for investments in other companies or technology transfer deals exceeding KRW 500 million (approximately USD 0.37 million). The proposal also calls for minority shareholders to nominate one inside director and one outside director, expanding the current four-member board to six members.
Several of the demands would allow minority shareholders to exert substantial influence over management. Most notably, the proposed requirement for unanimous board approval for investments or technology transfer transactions exceeding KRW 500 million (USD 0.37 million) would effectively grant veto power to directors nominated by minority shareholders. If even one such director opposes a proposal, the agenda item could not pass, potentially paralyzing company operations. The Minority Shareholders Alliance stated that it would disclose its director nominees if the company accepts the proposal.
The proposal to introduce director qualification requirements is widely viewed as directly targeting Kim Jeong-geun, the founder and former CEO of Oscotec. The amendment would bar individuals from standing as director candidates if their reappointment was rejected at a shareholders’ meeting. Kim failed to secure reappointment as an inside director at the shareholders’ meeting earlier this year. He currently retains an advisory title but is reportedly not attending the company on a regular basis.
The demands also include easing the company’s supermajority voting system stipulated in the articles of incorporation. Under the current articles, the appointment or dismissal of directors through shareholder proposals requires approval from at least four-fifths of the total issued shares, a threshold higher than that of a special resolution. This provision effectively limits minority shareholders’ influence over board composition. A lawsuit seeking to invalidate this clause is currently underway; the company lost the first trial last month and has since filed an appeal. The Minority Shareholders Alliance is calling for the requirement to be lowered to that of a standard special resolution—approval by at least one-third of issued shares and two-thirds of shares present at the meeting.
The Minority Shareholders Alliance warned that if shareholder proposals are unfairly rejected, it would vote against all agenda items proposed by the company. At an extraordinary shareholders’ meeting held on the 5th, a significant number of agenda items were indeed voted down. A proposed amendment to the articles of incorporation to increase authorized shares from 40 million to 50 million—aimed at converting Genosco into a wholly owned subsidiary—was rejected.
The alliance had previously advocated for Genosco to become a 100% subsidiary but has since reversed its position. It reportedly concluded that such a conversion may not benefit minority shareholders and could result in shareholder losses if Genosco’s valuation is set excessively high. Oscotec currently holds a 59.12% stake in Genosco and would need to acquire the remaining 40.88% to make it a wholly owned subsidiary.
Many of the minority shareholders’ demands are viewed as difficult for the company to accept. An Oscotec official stated, “It would be difficult to accept the minority shareholders’ proposal as-is without a process of compromise,” adding, “It could make progress difficult across all areas, including research and business operations.” However, amendments to the articles of incorporation ultimately require approval at a shareholders’ meeting, regardless of the company’s stance.
Oscotec’s vulnerability to minority shareholder pressure stems from weak management control by its leadership. Former CEO Kim Jeong-geun holds a 12.46% stake in the company, and even when combined with holdings of related parties and board members, the total reaches only 12.67%. In contrast, minority shareholders collectively hold 66.71% of the company’s shares, with the currently organized minority shareholder bloc estimated to control approximately 12–13%.
