[THE INVESTOR] Woongjin Group has filed a 26 billion won (US$22.61 million) lawsuit against MBK Partners for selling its stake in Coway in an after-hours block deal, according to news reports on July 3.
The former owner of Coway, a home appliance company best known for water purifiers, claimed that the deal breaches their 2013 contract that entitles it to a right of first refusal. When Woongjin sold 30.9 percent stake to MBK Partners, the contract included a clause that said it should notify the former owner in a written statement before it handed over all or part of its stake in Coway.
The private equity fund manager sold a 3.48 percent stake (3.78 million shares) it owns through SPC Coway Holdings in May. It says it used another provision that allows exceptions for outside dealings that do not target a specific entity.
Regardless of the outcome of the lawsuit, this legal action will further impair MBK Partners’ prospects of offloading Coway. The company has been seeking to collect on its investment since a first failed attempt two years ago.
By Hwang You-mee (glamazon@heraldcorp.com)