Kumho Petrochemical’s management rights dispute, the world’s largest shareholders’ advisory for his uncle’s hand

Institutional Shareholder Services (ISS) of the United States, a company that advises shareholders, announced that they agree with the opinions of current management, including Chairman Chan-koo Park, at the general shareholders’ meeting scheduled for Kumho Petrochemical on the 26th. Kumho Petrochemical’s management expects that about 30% of foreign shareholders will follow the opinion of ISS.

According to Kumho Seokhwa on the 14th, ISS announced its affirmative position against a dividend of 4,200 won per share (common stock) and the appointment of outside directors such as Park Jong-hoon as executive director and former Constitutional Judge Lee Jeong-mi. The dividend and appointment of directors is a conflict between the current management, including Chairman Park Chan-gu, and Park Cheol-wan, the nephew of Chairman Park.

Managing Director Park has posted a dividend of 11,000 won per share and an agenda for the appointment of an executive director for himself at the shareholders’ meeting. ISS encouraged shareholders to oppose this. ISS concluded that “when the market environment is difficult, it can put a financial burden on the company.” In addition, ISS evaluated that “Kumho Petrochemical’s shareholder return and profit-generating ability are at a higher level compared to those in the same industry.” An official from Kumho Petrochemical said, “It is meaningful that the world’s largest voting rights advisor gave an opinion in favor of the company’s agenda. We will be recognized for the rationality and authenticity of the company’s proposal through major domestic and foreign voting advisors in addition to the ISS.”

Meanwhile, Park’s father-in-law, Chairman Heo Kyung-soo, Cosmo Group’s chairman, recently bought a 0.05% stake in Kumho Petrochemical for about KRW 3 billion, helping to support his strength. Chairman Heo Kyung-soo is a cousin with Huh Tae-soo, chairman of GS Group. Accordingly, managing director Park’s stake increased from 10.12 to 10.16%. The shares bought by Chairman Huh do not have voting rights at this shareholders’ meeting. For this reason, there is an interpretation that Park’s side is preparing for the long-term war. Chairman Park Chan-koo’s share in Kumho Petrochemical is about 14.8%.

Reporter Sunwook Choi [email protected]