Name

(Corporate Name)

Type of Shares

Number of
Shares Held

Relationship
with the
Company

Relationship 

with Proxy
Solicitor

Note

Sung-Hyun Song

(Hannuri Law Firm)

Hyun-Ju Ku

(Hannuri Law Firm)

Han Gyul Lim

(Hannuri Law Firm)

Name

(Corporate Name)

Type of Shares

Number of
Shares Held

Relationship

with the
Company

Relationship

with the Proxy Solicitor

Note

Public Notice for Calling AGM of Shareholders

Start Date

End Date

Date of AGM of
Shareholders

Mar. 02, 2023

Mar. 08, 2023

Mar. 17, 2023

Mar. 17, 2023

제2호 의안: 정관 변경의 건('반대')

정관 제32조 '이사의 수' 감소와 정관 제44조 '감사의 수' 감소가 포함된 제2호 의안에 대하여 '반대' 의견으로 의결권 행사 또는 위임을 요청합니다.

제3-1호 의안: 상근 감사 이준홍 선임의 건('반대')

이준홍 후보자는 경영진으로부터 독립적인 감사 후보로 보기 어려울 뿐만 아니라 주총소집공고상 '공직자윤리위원회 취업승인 심사결과에 따라 선임이 취소될수 있음' 기재에 비추어 감사 자격에 대한 불확실성이 있으므로 제3-1호 의안에 대하여 '반대' 의견으로 의결권 행사 또는 위임을 요청합니다.

제3-2호, 제3-3호 의안: 비상근 감사 길민석, 남창우 선임의 건('찬성')

독립적이고 전문적으로 견제기능을 강화할 감사 선임을 위해 제3-2호, 제3-3호 의안에 대하여 '찬성' 의견으로 의결권 행사 또는 위임을 요청합니다.

하이록코리아(“회사")는 2022년 말 기준 국내외 기관투자자(35%) 및 일반주주(18%)를 포함한 다양한 주주들로 이루어져 있습니다. 그러나 권유자는 지배주주 중심의 의사결정, 회사와 지배주주 소유기업 간 불투명한 내부거래로 인해 회사가 시장에서 저평가되고 있다고 판단합니다. 

과거 연결 편입되었던 회사의 핵심 계열사인 협동정공, 하이록단조는 현재 지배주주 일가 소유로 전환되었고, 현재 하이록코리아와의 거래를 통해 대부분의 매출을 일으키고 있습니다. 이사회는 지배주주 소유 기업과의 물품 거래, 지분 거래에 앞서 적법절차에 따라 회사의 최선의 이익을 위한 판단을 하였어야 하나, 위 거래에 관한 감시와 견제 역할을 제대로 수행하지 못한 것으로 보입니다. 

회사의 독립성 강화 필요성은 지속적으로 지적되어 왔습니다. 국민연금은 제42기 정기주주총회(2020. 3.) 당시 '감사 선임의 건'에 대하여 '장기 연임에 따른 독립성 훼손 우려'를 이유로 반대하였습니다. 글로벌 의결권 자문사는 제44기 정기주주총회(2022. 3.) 당시 '사내이사 선임의 건'에 대하여 '이사회 독립성 부재’를 이유로 반대를 권고하였습니다. 

권유자는 회사가 처해있는 문제의 핵심은 독립적이고 전문적인 견제기능을 갖춘 감사의 부재에 있다는 판단하에 위와 같이 의결권 대리행사 권유를 합니다. 보다 상세한 캠페인 내용은 당사 홈페이지를 참조하시기 바랍니다(http://www.quadim.com/sc04). 

Agenda 2. Amendment of Articles of Incorporation('Against')

The Board of Directors is proposing to decrease the number of Directors on Article 32 and the number of Internal Auditors on Article 44. For this purpose, we request the shareholders to grant proxies to QUAD for the casting votes against of Agenda 2.

Agenda 3-1. Appointment of Auditor: Lee, Joon Hong('Against')

Disclosure on Public Announcement of Convocation of AGM states 'Lee Joon Hong's candidacy may be subject to revocation based on the result of the findings of Korea Public Service Ethics Committee'. For his uncertain candidacy and lack of independency, we request shareholders to grant proxies to QUAD for the casting votes against of Agenda 3-1.

Agendas 3-2 and 3-3. Appointment of Auditors: Gil, Min-Seok and Nam, Chang Woo('For')
Due to strong qualification as certified public accountants independent to Hy-Lok Korea, we request the shareholders to grant proxies to QUAD for the casting votes in favor of Agendas 3-2 and 3-3.

Hy-Lok Korea(the "Company") is a publicly traded company in Korea with diversified pool of shareholders. As of December 31, 2022, the Moon Family(the "Controlling Family") owns 42% of the Company while local and global institutional shareholders consist of 35% of ownership and individual shareholders account for 18% of number of outstanding shares. Despite its diversified structure, suboptimal governance and mismanagement practice focused on the Controlling Family only has led to an understandable under-rating of the Company. 

In specific, we find it problematic that ownership of the key private entities that were once consolidated are now transferred to the Controlling family only to conduct business with the Company. In addition, we find the Board of Directors in which unanimously voted in favor of such related party transactions questionable and accountable for. Public disclosures are limited without factual explanations and at some cases, are not disclosed.

It is no coincidence that various stakeholders voiced concerns on the independent structure within the Company. In 2020, National Pension Service("NPS"), one of the key institutional shareholders, voted against on appointing internal audit candidate proposed by the Company. NPS disclosed that 'prolonged tenure of the current internal audit member is likely to deteriorate independency of the position'.  In addition, in 2022, one of the global proxy advisory firms advised voting against the election of directors concerning lack of Board independence. 

As such, in upcoming AGM proxy solicitation, QUAD is proposing the election of GIL, Min-Seok, CPA, and NAM, Chang-Woo, CPA, as internal auditors. Underlying this proposal is QUAD's view that independent board and system is necessary to assure Hy-Lok Korea's value accrues in a fair way to all shareholders.

Others

For Agenda items other than the Agenda items specifically referenced in Sections 2(Amendment of Articles of Incorporation) and 3(Appointment Internal Audit Members) above, we request the shareholders to grant proxies to QUAD for the casting of votes either in favor or against as determined by each shareholder.

For more information on ongoing engagement, please visit our website at:
http://en.quadim.com/sc

Whether Delegation by Electronic Power of Attorney Forms is possible 

Not Applicable

Period of Delegation by Electronic Power of Attorney Forms

Managing Administration of Electronic Power of Attorney Forms

Internet Homepage Address of delegation of Electronic Power of Attorney Forms

Other Note

O

O

O

O

X

Name of Homepage

Internet Address

Others

Proxy Solicitor plans to send a Power of Attorney Forms by e-mail only if the solicited shareholder has indicated his intention to receive it by the e-mail.

- Mail reception until shareholders' meeting begins(Mar. 17, 2023)
- Mailing address :

Jay(Yoon Jae) Shin, Managing Director
QUAD Investment Management
Three IFC 29 Floor, 10 Gukjegeumyung-ro Youngdeungpo-gu, Seoul, Korea
(Zip Code: 07326)

-

Date/Time

Place

Electronic voting

Not Applicable

Period of Electronic voting 

Managing administration of Electronic voting 

Homepage address

Other notes

Voting in writing

Not Applicable

Period of Voting in writing

Method of Voting in writing 

Other notes

-

-