KCGI "Cho Won-tae and Ha Eun-yong Clearly Disqualified as Directors... Cannot Trust Proxy Advisors on Voting Rights"

[Asia Economy Reporter Minji Lee] The private equity fund KCGI has stated that it cannot trust the opinions presented by some proxy advisory firms, including ISS, on the agenda of the Hanjin KAL regular shareholders' meeting.

Kang Sung-boo, CEO of KCGI (center), is answering questions at a press conference held by the shareholder alliance for the normalization of Hanjin Group at the Glad Hotel Yeouido, Yeongdeungpo-gu, Seoul on the 20th. Photo by Kim Hyun-min kimhyun81@

On the 20th, KCGI said in a press release, "Raising issues of objectivity and neutrality against Sustainvest, a proxy advisory firm that gave favorable opinions on the inside and outside director candidates proposed by the shareholder coalition, is nothing but a malicious accusation."

Furthermore, KCGI stated, "On the contrary, some proxy advisory firms such as ISS and the Korea Corporate Governance Service gave favorable opinions on director candidates Cho Won-tae and Ha Eun-yong, who clearly fall under the disqualification grounds for directors amid ongoing Airbus rebate allegations, which is a reversal of their own guidelines." They added, "Moreover, the recommendation of Professor Cho Myung-hyun, who served as the head of the Korea Corporate Governance Service for two years, as an outside director for the Hanjin Group raises doubts about the objectivity of the Korea Corporate Governance Service."

KCGI also expressed concerns regarding Professor Heo Hee-young of the Department of Business Administration at Korea Aerospace University, who is a member of the National Pension Service’s Stewardship Committee. KCGI explained, "Commissioner Heo Hee-young is affiliated with the Jungseok Inha Foundation, where Hanjin KAL inside director candidate Cho Won-tae has been a registered director since 2008, raising concerns about conflicts of interest."

Finally, KCGI emphasized, "Several overseas pension funds have expressed opposition to inside director candidates such as Woo Ki-hong of Korean Air due to negligence in management and supervision. This clearly applies to inside director candidates Cho Won-tae and Ha Eun-yong as well, constituting grounds for disqualification."

They added, "Due to the management crisis, it is necessary to appoint a new board of directors that will transparently manage Hanjin KAL with professional managers, rather than the current CEO Cho Won-tae, who has serious disqualification grounds."

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