Executive Director Park Cheol-wan Launches All-Out Effort to Secure Proxy Votes Ahead of Kumho Petrochemical's General Meeting

National Pension Service (7.91%) and Foreign Investors (27.74%) Likely to Decide Votes
Board Meeting in Early March and Shareholders' Meeting at End of March

Park Cheol-wan, Executive Director at Kumho Petrochemical

[Asia Economy Reporter Hwang Yoon-joo] Park Cheol-wan, executive director who is in a management rights dispute with his uncle Park Chan-gu, chairman of Kumho Petrochemical, is launching an all-out effort to secure proxy votes ahead of the shareholders' meeting. Foreign investors, who hold a 27.74% stake (as of February 16), are expected to sway the direction of the vote.

Executive Director Park Cheol-wan filed an injunction with the Seoul Central District Court to inspect and copy the shareholder register of Kumho Petrochemical. Park stated, "From the day the injunction request is served, Kumho Petrochemical must allow the applicant and the applicant's legal representatives to inspect and copy the shareholder register as of the end of last year during business hours within 7 business days excluding holidays," and demanded, "If this is not complied with, pay 100 million KRW per day until compliance is completed." If the court permits the inspection of the shareholder register, Kumho Petrochemical is expected to deliver the register to Park's side by the end of this month at the latest.

The inspection of the shareholder register means that Executive Director Park intends to identify major shareholders and secure voting rights, setting the stage for a vote battle at Kumho Petrochemical's shareholders' meeting in March. Park is reportedly demanding to be appointed as an inside director whose term expires this year, using the expansion of dividends as leverage, and also to replace all four outside directors.

Currently, looking at individual shareholdings in Kumho Petrochemical, Executive Director Park holds the largest stake at 10%. Chairman Park Chan-gu (6.69%), his son Executive Director Park Jun-kyung (7.17%), and daughter Park Ju-hyung (0.98%) together hold 14.8%, which provides some margin but is not a situation to be complacent about. The National Pension Service (7.91%) and foreign investors' stake (27.74%) could act as variables.

Previously, the National Pension Service opposed Chairman Park Chan-gu's appointment as an inside director at the 2016 shareholders' meeting citing a history of corporate value damage, and opposed his reappointment in 2019 due to shareholder rights infringement.

Even if the National Pension Service sides with Chairman Park, the situation could change if foreign investors align with Executive Director Park. Last month, Park sent a shareholder proposal to Kumho Petrochemical demanding dividend increases and director replacements. Specifically, he proposed a striking dividend of 10,000 KRW per common share and 10,100 KRW per preferred share. This is about seven times the dividend paid last year (1,500 KRW for common shares and 1,550 KRW for preferred shares). Considering the tendency of foreign investors to prioritize shareholder rights, this is not a situation to be taken lightly.

A Kumho Petrochemical official said, "Although the National Pension Service exercised voting rights based on corporate value damage at that time, the situation is different this time," adding, "Since this is a management rights dispute within the family, it is difficult to make a hasty judgment on what decision will be made."

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