[Click eStock] "Kumho Petrochemical, Increased Stock Volatility Amid Potential Management Dispute"

[Asia Economy Reporter Ji Yeon-jin] As the possibility of a management rights dispute at Kumho Petrochemical has been raised, causing a recent surge in its stock price, it is expected that the stock price will continue to experience increased volatility going forward.

SK Securities stated on the 29th that since Kumho Petrochemical is approaching its regular shareholders' meeting in March, it is possible to gauge the direction of the management rights dispute, and that stock price volatility is expected to expand until the dispute becomes more visible. Park Han-saem, an analyst at SK Securities, analyzed, "Considering the past management rights dispute at Hanjin KAL, which showed stock price volatility unrelated to fundamentals, there is a possibility of stock price movements due to factors other than the core business."

The possibility of a management rights dispute arose on the 27th when Park Cheol-wan, Executive Director of Kumho Petrochemical, announced through an electronic disclosure that "he will dissolve the joint shareholding and special relationship with the existing representative reporter (Chairman Park Chan-gu)." Executive Director Park is the son of the late Park Jeong-gu, former chairman of Kumho Group, and the nephew of Park Chan-gu, chairman of Kumho Petrochemical. He currently holds a 10.0% stake in Kumho Petrochemical, making him the largest individual shareholder. Executive Director Park stated that the purpose of holding shares is "to exercise rights as a shareholder."

Chairman Park holds a 6.67% stake in Kumho Petrochemical, and Park Jun-kyung, Executive Director and son of Chairman Park, holds 7.17%. When combined with Park Joo-hyung's (0.98%) and other special related parties' shares (0.03%), the total is 14.87%, which is 4.87% more than Executive Director Park Cheol-wan's 10% stake, the largest individual holding.

In the securities industry, since Executive Director Park sent a shareholder proposal including agenda items for dividend expansion and replacement of outside directors, and there is speculation that his allied forces may secure 3-4% of shares, the possibility of a management rights dispute is expected to continue.

However, Kumho Petrochemical criticized Executive Director Park's shareholder proposal as an unreasonable judgment the day before. At the same time, they stated they will specifically review the shareholder proposal and drew a line by saying it should not escalate into a management rights dispute.

Kumho Petrochemical stated, "As of the end of December 2020, we received shareholder proposals from Executive Director Park Cheol-wan, a major shareholder and special related party of the company and currently an internal executive, regarding the recommendation of outside directors, auditors, and dividend expansion," adding, "We will carefully review the contents of this shareholder proposal and recent circumstances and take measures in accordance with relevant laws and regulations."

This content was produced with the assistance of AI translation services.