Rapolabs, which is seeking to acquire SK Stoa, has withdrawn its application for approval to change the company’s largest shareholder. Rapolabs said it has not abandoned the acquisition and will reapply for approval after revising its contract with SK Telecom.

The Korea Communications Commission said it received a report on the agenda item on the application for approval to change SK Stoa’s largest shareholder at its 24th full meeting on July 22 and ended its review process.

Rapolabs signed a stock purchase agreement with SK Telecom for SK Stoa shares in December last year and applied for approval to change the largest shareholder in January. The commission made three requests for supplementary materials and collected viewers’ opinions, and ran a review panel of seven external experts from July 8 to 10.

The review panel said Rapolabs’ financing and operating plans, and its plan to support SK Stoa as the largest shareholder and contribute to broadcasting development, did not meet approval standards.

Rapolabs, however, withdrew the application on July 16, saying it would change its capital-raising plan, including the acquisition transaction structure and the composition of investors. The review process ended without a separate commission vote on whether to approve the change.

Rapolabs said its push to acquire SK Stoa remains unchanged. A Rapolabs official said, "We determined it is necessary to re-sign a shareholders’ agreement with SK Telecom to ensure stable operation of SK Stoa’s broadcasting business and protect stakeholders," adding, "We plan to reapply for approval to change the largest shareholder after supplementing the contract."

The commission said it plans to look into potential violations of the Broadcasting Act separately from the withdrawal.

Cheon Ji-hyeon (천지현), director general of the Broadcasting and Media Promotion Bureau, said, "If someone becomes the largest shareholder or effectively controls the company without receiving approval for the change, corrective orders and criminal complaints are possible," adding, "We will review whether the main contract was properly terminated and, if it was not, whether management control is being exercised."

Commissioners said institutional improvements are needed after the application was withdrawn after the review was completed.

Ko Min-su (고민수), a commissioner, said, "If the application was withdrawn with the aim of avoiding an adverse disposition, it is also necessary to consider measures to restrict refiling," adding, "If there is no related legal basis, legislation is also needed."

Choi Soo-young (최수영), a commissioner, said, "As this is an unusual case of a startup acquiring a major conglomerate-affiliated home-shopping company, market confusion could arise from the withdrawal," adding, "Please review without omission any measures the commission can take."

Lee Sang-geun (이상근), a commissioner, said, "In a situation where procedures had progressed to the point that the review could be completed, I will personally substitute the expression 'nasty' for what this has become."

Ryu Shin-hwan (류신환), a commissioner, said, "Since they cited changes to the investor composition and capital-raising plan as the reason, there is a possibility a reapplication will be made," adding, "If a new application comes in, it must be reviewed strictly."

Kim Jong-cheol (김종철), the chair, asked the secretariat to "look into whether there are any procedural improvements that can raise market predictability and reduce unnecessary administrative waste."