- Park: “I will strive to ensure Kumho Petrochemical, as a public company, puts corporate and shareholder value on top of its priorities.”
- Park gained 52.7% of the vote for appointment as inside director, meeting the AGM resolution requirement with wide support from fellow shareholders.
- Due to the confusion caused by misleading disclosure, both parties reached agreement that only one nominee with more votes will be appointed.
- Regardless of the result, Park expressed disappointment that the National Pension Service (NPS) did not consider the current top management’s legal troubles including illegal employment.
- As the largest individual shareholder, Park will continue efforts to put the current management back on the right track by addressing reexamination of Kumho Resort acquisition deal, disposal of excessive treasury shareholding and normalization of dividend payout.
- Park also stated, “This shareholder proposal has proven there is still chance of building a healthy shareholder engagement culture in Korea. I will continue to speak on behalf of all shareholders through transparent communication and will call for extraordinary meeting of shareholders if necessary.”
SEOUL, South Korea, March 26, 2021 /PRNewswire/ — Chul Whan Park, senior executive and the largest individual shareholder of Kumho Petrochemical, while expressing disappointment in disapproval of his appointment as inside director at the company’s annual general meeting of shareholders (AGM) held today March 26, remained optimistic. “This is only the beginning. I will continue with my efforts to enhance the company’s corporate and shareholder value.” Park received 52.7% of the votes for approving his appointment as an inside director, meeting AGM resolution requirement with wide support from fellow shareholders. While the two nominees proposed by shareholder Park and the company were incompatible, the company did not clarify this on the AGM disclosure, causing confusion among shareholders with regards to their voting decisions, misleading them to believe that they can vote for both nominees. Later, the company and the AGM inspector agreed to approve only one inside director nominee with higher percentage of votes.
“It is unfortunate that I was unable to join the board, nevertheless, I am more than grateful for such heart-felt support sent from all our fellow shareholders who recognized the sincerity of my plans and ideas on transforming the company for the future,” said Park. “Starting with my campaign, I look forward to the company acknowledging the need for governance overhaul and taking meaningful actions for improvement.”
Park emphasized, “Regardless of the AGM result, I will fulfill my responsibility as the largest individual shareholder and put the management back on the right track by demanding changes in policies that go against shareholder interests, such as Kumho Resort acquisition deal, excessive treasury shareholding, dividend payout well below industry average, and etc.,” and made it clear that he will continue holding the management accountable and prevent inappropriate decision-makings, and improve the current board’s incompetence in governance. He added, “This shareholder proposal is not about management conflict; it is about the basic rights of all shareholders who are entitled to engage in company’s business activities and bring about positive impact.”
“This shareholder proposal was a meaningful start to pave way for a more proactive culture of shareholder engagement in companies’ business management,” Park further noted. “I will continue on with my deliberations with fellow shareholders and stakeholders for Kumho Petrochemical’s bright future ahead.” He also said he may call for extraordinary meeting of shareholders if necessary, to ensure the company reflects on the ideas of its shareholders.
World’s top pension and public fund, as well as corporate governance experts and analysts inside and outside Korea, supported and gave positive feedbacks on Park’s ideas of governance improvement, saying “This is one of the most rare and interesting cases of shareholder engagement in Korea in the past decade.”
Norges Bank Investment Management (NBIM), manager of world’s biggest sovereign fund, and California Public Employees’ Retirement System (CalPERS) voted in favor of Park’ shareholder proposals, and proxy advisors and expert groups including Glass Lewis, Sustinvest, Daeshin Corporate Governance Institute, and Center for Good Corporate Governance (CGCG) also published recommendations supporting his proposal which called for improvement in governance and enhancing corporate and shareholder value of the company.
Park did express disappointment in NPS’ voting decision, stating “ESG values are increasingly gaining significance across the globe, and it is unfortunate that NPS did not take into consideration the legal troubles of the current top management including the breach of fiduciary duty and duty of loyalty, followed by illegal employment. It is still hard to understand how Chairman Chan Koo Park receives annual salary of KRW 5.1billion while being under employment restriction.”
Park insisted, “Companies can no longer ignore the rising voices of eight million shareholders in Korea. Kumho Petrochemical must recognize that the company does not belong to a particular individual but is owned by all shareholders as a ‘public company’ and should put shareholders’ value as the top priority.”
He added, “I will carry on my communication with all my fellow shareholders to ensure Kumho Petrochemical transforms into an innovative company that leads its bright future, and further enhance long-term shareholder value, and I look forward to seeing more progress with better results at the next AGM.”