[News Space=Reporter seungwon lee] On the 21st, the day after defense company Hanwha Aerospace announced a plan to increase capital by 3.6 trillion won, the stock prices of Hanwha Group companies, including Hanwha Aerospace, Hanwha, Hanwha Systems, Hanwha Solutions, and Hanwha Ocean, all fell.

Issuing new shares of its own stocks can be an easy way for companies to raise capital. However, existing shareholders inevitably suffer losses due to dilution of their stakes.

The indiscriminate and unilateral capital increases used by unprofitable bio companies and some companies facing financial crises have been pointed out as one of the chronic ill effects of the 'Korea Discount' that infringes on the interests of many shareholders.

Hanwha Aerospace shareholders are upset. They are asking why they had to choose the method of increasing the number of issued shares when there were other methods of raising funds, such as borrowing, issuing corporate bonds, and utilizing internal reserves.

Just a month ago, Hanwha Group's founding family spent 1.3 trillion won of their own money to buy stocks in affiliates to strengthen their control, and there were growing criticisms of their inconsistent behavior, such as asking retail investors for new investment funds.

Hanwha Aerospace was a 'star' stock that stood out in the domestic stock market this year. Following the inauguration of the second Trump administration, the Atlantic Alliance split over support for the Ukraine war, and Europe simultaneously stepped up its military buildup, which was a positive factor.

It soared by more than double compared to the end of last year. Its market capitalization ranking also jumped from 28th place at the end of last year to 8th place in one fell swoop. Shareholders screamed in joy, saying, "It goes up when you wake up."

For a company, a paid-in capital increase is more attractive than borrowing or issuing corporate bonds because it does not incur interest expenses. In addition, since capital increases instead of debt, the debt ratio decreases, which also provides the added benefit of improving the financial structure.

On the other hand, it is seen as bad news for shareholders. Increasing capital does not immediately improve corporate performance such as sales or operating profit, because the number of shares increases immediately, which reduces earnings per share (EPS).

In addition to the management behavior of large corporations that goes against the stock market value increase, such as increasing the damage to existing shareholders through surprise paid-in capital increases, the financial authorities with the power to monitor and regulate are effectively abetting this.

In an online discussion forum, an investor criticized, saying, “If they increase capital when the stock price is at its highest, it means that the corporate mindset itself is wrong,” “The Hanwha Group family is making a killing before the revision of the Commercial Act,” “The moral laxity of conglomerate owners is the height of it,” and “Even Financial Supervisory Service Governor Lee Bok-hyun, who pretended to represent minority shareholders while opposing the revision of the Commercial Act, is ultimately on the side of conglomerates and vested interests.”