Heo Pil Seok, Chief Executive Officer of Midas International Asset Management Ltd has said that the fund manager would be selling off its Mando Corp's shareholdings. This comes after Mando announced it would be bailing out a construction affiliate.
In a telephone interview, Heo said, "We will sell off all of the company's shares. This issue clearly invades shareholders' profits."
This is the first institutional investor that has publicly opposed the plans of the auto parts maker to rescue a fellow unit in Chairman Chung Mong Won's Halla Group of Companies. Aside from Midas, seven other brokerages began cutting investment ratings since the plans were made public according to Bloomberg's data gathering service.
Mando had announced last April 12 that it would invest KRW378.6 billion or US$339 million in the purchase of new shares for Halla Engineering and Construction Corp. The amount is 76% greater than what Mando has as cash or near cash on hand as of December 31 reports. Both Halla Engineering and Mando are under the leadership of Chairman Chung, where Halla Engineering is also the biggest shareholder in Mando.
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