Korea303030.KQ
Halo Microelectronics Sued by Former CEO of Korean Subsidiary for 48.4406 Million Yuan
Halo Microelectronics announced after market close on September 17 that it had received a Notice of Case Acceptance served by the Nanhai District People's Court of Foshan City, Guangdong Province. Nam David Ingyun, the former foreign CEO of a controlled subsidiary, has sued the company on the grounds of a labor dispute, with the amount involved being 48.4406 million yuan. The case has been accepted by the court but has not yet been heard. The plaintiff's core claim is to require the company to exercise 3.2576 million stock options at an exercise cost of 1.73 yuan per share and register them in his name. If registration cannot be completed, he requests a judgment ordering compensation of 48.4406 million yuan for the loss of being unable to exercise the options. He also demands that the company provide a business registration certificate or copy in accordance with the Measures for the Administration of Funds for Foreign Employees of Domestically Listed Companies Participating in Equity Incentives, and that the company bear the litigation costs. The company stated that in March and April 2025, it discovered that Nam David Ingyun and others were suspected of stealing trade secrets, breaching fiduciary duties, and engaging in unfair competition during their employment. It has taken judicial measures to pursue their legal responsibility, and in accordance with the 2021 stock option incentive plan, it has suspended the exercise of options that had vested but not yet been exercised and temporarily withheld cooperation with foreign exchange registration and other capital outflow procedures. This lawsuit is related to the above measures. The plaintiff is a former director of Zinitix, Halo Microelectronics' Korean subsidiary. Zinitix is engaged in system semiconductor design, with its core product being touch controller chips, and is one of Samsung's suppliers. On September 2, 2026, the company disclosed that Zinitix had been designated as an administrative stock by the Korea Exchange starting September 3, 2026, because its total market value of common shares had been below 20 billion Korean won for 30 consecutive trading days, and there are risks such as delisting. In terms of performance, Halo Microelectronics' 2026 semi-annual report showed operating revenue of 529 million yuan, up 13.35% year on year, and a net loss attributable to the parent company of 30.3779 million yuan, narrowing the loss by 32.02% year on year. The company's acquisition of Zinitix formed goodwill of 64.2175 million yuan. If Zinitix ultimately triggers delisting, there is a risk of goodwill impairment.