Kumho Petrochemical Yeosu Plant. Photo Kumho Petrochemical Homepage
In a dispute over the management rights of Kumho Petrochemical, which is called the’nephew’s mess’, his nephew, Park Cheol-wan, 43, began to speed up the work of persuading shareholders. This is because the demand for dividend expansion, etc. proposed by Park, failed to pass the Kumho Petrochemical Board of Directors held on the 9th. Accordingly, the next goal was to check the decision of the board of directors led by his little father, Park Chan-gu (73), at the general shareholders’ meeting on the 26th.
Managing Director Park’s ultimate goal is to acquire management rights by taking control of the board of directors. On the evening of the 9th, Park said, “To increase the value of companies and shareholders, it is essential to improve the governance (governance) of the board of directors.” To this end, Park demanded that the four outside directors whose term ends starting at the shareholders’ meeting be filled with his close associates. He is an American attorney at the foreign law firm’Denton’s Lee’, Jo Yong-beom, Facebook’s general manager in Southeast Asia, Choi Jeong-hyun, a professor at Ewha Womans University’s Department of Environmental Engineering, and Lee Byeong-nam, a former representative of the Boston Consulting Group Korea Office. In the position of the executive director, Park himself decided to challenge.
Through this, Park decided to cancel the decision to take over Kumho Resort. He opposes Kumho Resort by saying that it has no connection with the petrochemical industry and its debt ratio reaches 400%. Managing Director Park argued that “the risk of shareholder value due to improper investment decisions such as the acquisition of Kumho Resorts and past acts of abandonment by the current management should be resolved.”
Nephew, targeting by increasing dividend
Chairman Park’s share of Kumho Petrochemical is 14.87%. Managing Director Park is 10.12%. Accordingly, Park’s plan is to present a plan to expand dividends and gain support from general shareholders. Managing Director Park suggested that a dividend of 11,000 won per share should be paid. However, the proposal failed to pass the board of directors on the 9th. The dividend agenda posted to the shareholders’ meeting is 4200 won per share. Park criticized, “It is far below the average dividend payout ratio of the same industry and KOSPI companies.”
Park Chan-gu, Chairman Kumho Seok-hwa (left) and Park Cheol-wan, executive director. Central photo
What Mr. Park expects is a court decision. If the request for provisional injunction with the content of’the 11,000 won dividend proposal should be raised to the shareholders’ meeting’ issued by Park is accepted by the court, a vote of 4200 won vs. 11,000 won will be held at the shareholders’ meeting. After hearing the opinions of both sides in court on the 5th, the court has been struggling with the conclusion for more than five days.
Uncle “Expand new business profits”
Chairman Park Chan-koo emphasizes the long-term vision. It announced plans to enter the battery material and bio business. The goal is to achieve 9 trillion won in sales by 2025. Kumho Petrochemical’s 2020 sales are 4.8 trillion won.
The current management’s position is that the dividend of 4200 won is also unprecedented. That is, the amount has more than doubled compared to the previous year (1500 won). Major shareholders, including Chairman Park, decided to receive a dividend of 4,000 won per share. As an outside director candidate, former Constitutional Judge Lee Jeong-mi, who read the decision to impeach former President Park Geun-hye, was appointed. In addition, he recommended Hwang Yi-seok, a professor at Seoul National University Business School, Choi Do-sung, a seating professor at Gachon University, and Professor Park Soon-ae, Seoul National University Graduate School of Public Administration.
The biggest weapon that Chairman Park will emphasize at the shareholders’ meeting is management performance. Last year, Kumho Petrochemical’s operating profit was 7421 billion won, more than double (103.1%) from 2019 (365.4 billion won). In addition, it is expected to show that the understanding and expertise of the industry and the willingness to create long-term profits are superior to that of Park’s side.
Reporter Sunwook Choi [email protected]
