A close friend of Mirae Asset Group Chairman Park Hyeon-joo recently sold his stake in Mirae Asset Venture Investment for 16.5 billion won cash ($14.50 million), a week after the investment firm went public on the second-tier Kosdaq, according to industry sources on March 26 .
Mirae Asset Group Chairman Park Hyeon-joo
JeonHong, a South Korean outdoor advertising agency wholly owned by the chairman’s friend Park Jung-ha, was the second-largest shareholder of the venture capital subsidiary. The firm held an 11.95 percent stake at the time of the IPO, while Mirae Asset Daewoo held 72.55 percent.
The agency said in a disclosure on March 22 that it sold some 2 million shares of Mirae Asset Venture Investment for between 7,600 won and 8,400 won apiece from March 19-20. Over the cited period, the venture capital firm’s stock price climbed 11.6 percent.
JeonHong’s ownership fell to 3.37 percent, and therefore no additional disclosures regarding stake sale are required. The firm has not elaborated on the reason for the sell-off in its disclosure.
The transaction is legitimate, as Chairman Park’s confidante is not regarded as an “affiliated person” -- an owner, his or her families and relatives.
Under the current rules, Kosdaq-listed shares owned by the largest shareholder or its affiliated people are locked up in the Korea Securities Depository for six months after the IPO. The rule was designed to minimize stock price fluctuations and protect retail investors from a drop in share price.
The same rule bans a venture capitalist from exiting for a month after IPO, if it made investments within two years. JeonHong is also exempted from this rule.
The advertisement agency, founded in 1975, bought 20 percent stake in 1999 for 6 billion won at the venture capital firm’s nascent stage. Over the past two decades, its asset value soared fourfold. Its shareholding ratio has decreased for two decades through a series of new issuance of shares and capital reductions, as well as a stock split in September 2018.
Mirae Asset Venture Investment is the 15th-largest venture capital firm in Korea by assets under management, at 340.9 billion won as of end-2017. Its IPO, aimed at enhancing private equity investment capacity, raised 20.2 billion won as its offer price was set at the price band ceiling of 4,500 won. The company shares were trading 2.7 percent lower at 6,740 won as of 2 p.m.
The venture capital firm’s parent company Mirae Asset Daewoo is a direct subsidiary owned by Mirae Asset Capital, whose 34.32 percent is held by Chairman Park.
By Son Ji-hyoung (firstname.lastname@example.org)