Key points
- Flashlight Capital sends Orion five demands
- What Orion pays its controlling family outside board roles
- Why Flashlight opposes Orion's JoongAng Ilbo bid
Activist investor Flashlight Capital Partners (플래쉬라이트캐피탈파트너스), or FCP, is urging Orion (오리온, 271560), the Korean maker of Choco Pie, to abandon its bid for JoongAng Ilbo (중앙일보) and stop paying controlling-family members unless they take board seats.
The Singapore-based fund outlined five demands in a public letter to Orion's board, Seoul Economic Daily (서울경제) reported Monday. FCP wants a response by November 13. The reports included no comment from Orion.
Orion shares were up 0.8% at 109,400 won ($82) as of 10:52 a.m. in Seoul on Monday, following Friday's close of 108,500 won ($81).
What FCP wants Orion to change
The fund's requests cover executive pay, shareholder returns, and where Orion invests its money. The letter asks Orion to take these five steps.
- Require controlling-family members to join the board as registered directors or stop receiving pay.
- Link executive pay to the share price.
- Return more surplus cash to shareholders.
- Withdraw from the JoongAng Ilbo bid.
- Explore the pet food business.
Korea Economic Daily (한국경제) reported the five demands. FCP has previously campaigned at KT&G, where FCP opposed a board proposal at the March 2025 shareholder meeting, and at security company S-1 since June.
The fund sees a steep valuation discount
FCP says Orion trades at about three times EV/EBITDA, compared with a median of 11.5 times for its global peers. The ratio compares enterprise value, which includes debt and subtracts cash, with earnings before interest, taxes, depreciation, and amortization.
The fund puts Orion's net cash and financial assets at about 2.1 trillion won ($1.57B), nearly half of Orion's 4.30 trillion won ($3.21B) market value at Friday's close, by our calculations.
With better governance and capital allocation, FCP estimates the shares could be worth 263,500 won ($197) to 354,000 won ($265). That's 143% to 226% above Friday's closing price, by our calculations.
Orion's owners are paid without sitting on the board
The pay demand is about chairman Dam Chul-kon (담철곤) and his wife, vice chairman Lee Hwa-kyung (이화경). In Korea, registered directors carry legal responsibility for board decisions, and shareholders vote each year on a limit for their total pay. The couple left the boards of Orion and its holding company, Orion Holdings (오리온홀딩스), in 2013, but both companies still pay them outside that limit, FCP says.
Orion's 2025 annual report lists both as non-board executives. Orion paid Dam 2.619 billion won ($1.96M) last year and Lee 2.037 billion won ($1.52M). Chief executive Lee Seung-jun (이승준), who is on the board, received 1.131 billion won ($845,000).
According to FCP's letter, cited by Asia Economy (아시아경제), the National Pension Service (국민연금), which holds 9.1% of Orion, has opposed Orion's director-pay limit four times, but the proposals passed. FCP's CEO Lee Sang-hyun (이상현) said Orion didn't answer the fund's earlier request. "We asked the company on September 15 for a meeting with the board and to see the shareholder register, but we didn't get an answer. It's the first time we've had this happen," he said.
FCP sees no reason for Orion to buy a newspaper
JoongAng Ilbo entered a workout in July, a debt restructuring led by its creditors instead of a court. The paper is selling control by issuing new shares, so the buyer's money goes into JoongAng Ilbo to repair its finances. Orion, which already owns the film company Showbox, was one of six companies to submit letters of intent and one of two reported to have offered a relatively high price. Orion is now doing due diligence.
FCP points to JoongAng Ilbo's 92 billion won ($68.8M) net loss in the first half and about 610 billion won ($456M) of debt and loan guarantees. "We can't find any synergy between the core confectionery business and a newspaper company," the fund said.
FCP also brought up an earlier Orion deal. Orion spent about 550 billion won ($411M) in 2024 for 25.73% of drug developer LigaChem Biosciences (리가켐바이오), and Orion's stock fell 18% right after the January 2024 announcement, according to FCP. Lee Sang-hyun pointed to the 2000s too, when Orion sold off businesses including cable TV company OnMedia and the Bennigan's restaurant business. "Haven't they learned a lesson from those failures?" he said.
At least one broker shares the concern. Hana Securities analyst Shim Eun-ju (심은주) wrote on October 15 that Orion's first media bid in 17 years could raise doubts about the company's long-term direction, The Buyer (더바이어) reported. Shim kept a buy rating and a 220,000 won ($164) target, about 103% above Friday's close.
For new growth, FCP suggests pet food, noting that global confectionery companies such as Mars and Nestle have moved into it.
Some Korean companies have increased shareholder returns after activist pressure. JB Financial raised its shareholder return target after the activist fund Align Partners became a major shareholder, and KT&G canceled about 1.8 trillion won ($1.35B) of its own shares in April. Separately, a minority shareholder group asked Samsung Electronics in August for a 45.5 trillion won ($34B) buyback, which was a shareholder demand, not a decision by Samsung.
Quotes are translated from Korean. Won figures are converted at 1,338 won to the dollar, the Hana Bank rate shown on Naver Finance on October 16, 2026.
