Follow the Cash — When Raised Capital Doesn't Move

On May 22, 2026, a KOSDAQ-listed company called Hankook Advanced Materials (062970) approved a KRW 10 billion private convertible bond. Half of that issuance went to Specialty Investment Co., an entity confirmed to be a special-related party of the de facto controlling shareholder, Satoshi Holdings. The disclosed use of proceeds was a single line: "acquisition of securities of other companies."

That single line is the entire window the minority shareholder has into where KRW 10 billion of newly created liability is about to go.

This is not a unique case. It is a template.

The Cash Governance Question

When a company raises capital, three things can happen. The cash goes into operations — equipment, hiring, inventory, working capital. The cash goes into capital efficiency — buybacks, dividends, debt reduction. Or the cash goes into something that looks like neither — short-term financial products, related-party loans, "other securities" with no further specification.

RaymondsIndex tracks the third category through the Cash Governance Index (CGI). CGI measures the share of raised capital that disappears into idle or related-party destinations within a defined window. Across 3,109 Korean listed companies, CGI is part of the signal stack that flagged Zone D positions with 85.9% lead-time accuracy before the underlying problem reached the income statement.

The Hankook Advanced Materials disclosure has all the markers CGI is built to catch. A private convertible. Fifty percent placed with a related party. A vague use-of-proceeds. A put option every three months one year after issuance. And the timing — the same controlling shareholder cluster had moved through a paid-in capital increase and a bonus share issuance in April, weeks before the CB was approved.

The Counterexample

Two weeks before the Hankook disclosure, Apple took a different path with cash. The board authorized an additional $100 billion in share repurchases for fiscal Q2 2026, raised the dividend 4%, and — for the first time in years — CFO Kevan Parekh formally retired the "net cash neutral" target. Apple now manages cash and debt independently. Capital is returning to shareholders explicitly and at scale.

Apple is a different conversation about cash. The point is not that Apple is small enough to compare. The point is that when a company is confident about where capital should go, the disclosure is specific, the mechanism is open-market, and the destination — shareholders — is unambiguous.

When a company is not confident, the disclosure is one line, the mechanism is a private placement, and the destination is "other securities."

Korea Parallel

The Korean market has been moving toward greater capital efficiency disclosure. The Korea Value-Up Index, launched in 2024, has more than doubled since inception. The Commercial Act revisions now require mandatory cancellation of treasury shares. Korea Exchange has tightened delisting standards and added half-year complete capital impairment as a substantive review trigger from July 2026.

But none of these reforms force a company to disclose where convertible bond proceeds will be deployed beyond a single phrase. That gap — between what is filed and what is known — is the gap CGI is built to read.

Academic Frame

Jensen (1986) argued that excess free cash flow controlled by managers without strict capital discipline produces agency costs that minority shareholders bear disproportionately. Johnson, La Porta, Lopez-de-Silanes, and Shleifer (2000) showed empirically that related-party transactions in emerging markets are a primary channel through which value migrates away from minority shareholders.

The Hankook disclosure sits exactly where those two literatures meet.

The Investor Takeaway

By the time the financial statement shows the cash has been used, the structural decision has already been made — and unwound. CGI is a leading indicator because it watches the disclosure, not the result.

The cash was raised. The relevant question is the one the disclosure refused to answer.