KCGI "CEO Cho Won-tae Encourages Small Shareholders to Exercise Voting Rights with Gift Certificates... Police Report Filed"
[Asia Economy Reporter Minji Lee] The private equity fund KCGI has filed a complaint with the Seoul Metropolitan Police Agency's Intelligent Crime Investigation Unit against CEO Cho Won-tae for the crime of providing benefits related to shareholders' exercise of rights under the Commercial Act.
On the 19th, KCGI stated in a press release, "It has been confirmed that Hanjin KAL encouraged favorable voting for CEO Cho Won-tae by offering gift certificates and other benefits to some shareholders during the proxy voting solicitation process."
KCGI continued, "The Supreme Court regards the act of the CEO providing shareholders who voted in advance or directly with gift certificates worth about 200,000 KRW, calculated by the company, free of charge as a crime of providing benefits related to shareholders' exercise of rights under the Commercial Act. Providing benefits only to certain shareholders to obtain proxy voting rights is a criminal act clearly prohibited by the Commercial Act," they pointed out.
According to domestic Commercial Act, a company cannot provide benefits related to shareholders' exercise of rights, and directors or auditors who violate this are subject to imprisonment for up to one year or a fine of up to 3 million KRW.
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Additionally, KCGI explained, "CEO Cho Won-tae held Hanjin KAL shares below 5%, which allows special related parties such as self-insurance and the Korean Air Alumni Association to avoid disclosure of shareholding, and concealed these facts. Regarding the violation of the 5% reporting obligation by self-insurance, we have requested criminal punishment and administrative sanctions against CEO Cho Won-tae and others from the Financial Supervisory Service."
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