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| A fund managed by Macquarie invested in Yongin-Seoul Expressway, which opened in 2009. Courtesy of Yongin-Seoul Expressway |
By Park Hyong-ki
Macquarie Korea Asset Management and Platform Partners Asset Management are extending their fight over the management of an infrastructure fund into a court battle, according to both companies.
Macquarie has recently filed a court injunction, requesting it to suspend trading of the fund listed on the stock market by investors who borrowed the stocks from their lender.
The Australian asset manager suspects the lender is Platform Partners, claiming it is lending its shares to "buy votes irregularly" ahead of the fund's shareholders meeting on Sept. 19.
Securities lending, the act of loaning shares of a stock to an investor or firm, requires the borrower to put up collateral. When a security is loaned, the title and the ownership are also transferred to the borrower.
Platform is seeking to change the fund's asset manager to KORAMCO REITS Management & Trust, which agreed to manage the fund at one-eighth of Macquarie's management fees. This is because Macquarie refused to lower its fund management fee toward a level demanded by Platform.
Macquarie said its injunction filing came as it had detected a volume increase in the trading of the fund by borrowers, citing data from the Korea Financial Investment Association.
They are not borrowing and trading for the sake of "short selling the fund," but possibly to act as Platform's "white knights," or its friends who would vote in favor of Platform.
"The borrowers' trading volume increased, accounting for nearly 8 percent of the total," said a Macquarie official.
A local daily identified two of the borrowers allegedly partnering with Platform as Bookook Securities and Hankook Tire.
There is speculation that Elliot Tcha, Platform's managing director, has reached out to his brother-in-law Cho Hyun-sik, the president of Hankook Tire Worldwide, a listed tire and rubber holding company, for help. Cho Hyun-sik is the son of Hankook Tire Worldwide Chairman Cho Yang-rai.
Platform has denied such accusations prompted by Macquarie, saying they are "groundless and untrue," and that it will fight Macquarie in court.
Hankook Tire also denied it had borrowed shares of the fund from Platform to trade for the asset management company. Bookook Securities could not be reached for comments. The brokerage has denied investing in the fund for Platform in the local press.
Macquarie has been managing the Macquarie Korea Infrastructure Fund's (MKIF) since the early 2000s. The MKIF has 12 infrastructure assets including the Yongin-Seoul Expressway, Seoul-Chuncheon Highway and Incheon Airport Expressway.
Platform holds a 4.99 percent stake in the fund, with a 3.2 percent voting right. Macquarie Group has a 3.6 percent percent stake in the fund.
The fund's major investors include London-based Newton Investment Management, a global investment management company of BNY Mellon, and Hanwha Life Insurance.
Last month, Macquarie filed a disclosure, indicating the Sept. 19 general meeting will discuss topics concerning a change of the fund's corporate director and investment manager.
KORAMCO REITS Management & Trust has been listed as a "candidate" to replace Macquarie Korea Asset Management. KORAMCO has also been identified as Platform's proxy solicitor.
Macquarie's board passed a resolution to adopt an electronic voting system, enabling the fund's shareholders, who will not be able to attend the meeting, to cast a vote online, the company said.
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