Court Orders "Kumho Petrochemical to Include Park Cheol-wan's 'Shareholder Proposal' as Agenda Item at General Meeting"

Park Cheol-wan, Executive Director at Kumho Petrochemical

[Asia Economy Reporter Seongpil Cho] The court has ruled that Park Cheol-wan, executive director and nephew of Chairman Park Chan-gu, who is engaged in a dispute over the management rights of Kumho Petrochemical, must put forward his shareholder proposal as an agenda item at the company's general shareholders' meeting.

The Seoul Central District Court Civil Division 50 (Chief Presiding Judge Song Kyung-geun) partially accepted Park's provisional injunction request on the 10th to have the shareholder proposal included in the agenda of Kumho Petrochemical's general meeting. The court ordered that the proposal suggested by Park be included in the agenda of the regular shareholders' meeting scheduled for the 26th, and that the contents of the proposal be notified to shareholders at least two weeks before the meeting. Park's shareholder proposal to be included as an agenda item requests that Kumho Petrochemical's dividends be set at 11,000 KRW per common share and 11,050 KRW per preferred share.

Earlier, in January, Park demanded the exclusion of Chairman Park and related parties and requested dividends of 11,000 KRW per common share and 11,100 KRW per preferred share. However, Kumho Petrochemical reportedly raised issues, claiming that Park's shareholder proposal might violate the company's articles of incorporation. According to Kumho Petrochemical's articles of incorporation, the differential cash dividend amount between common and preferred shares is limited to 1% of the par value (5,000 KRW), which is 50 KRW.

In response, on the 22nd of last month, Park submitted a revised shareholder proposal to the company correcting the preferred share dividend to 11,050 KRW per share. Nevertheless, when Kumho Petrochemical considered not including the proposal in the agenda by citing the Commercial Act regulation that shareholder proposals must be submitted at least six weeks before the general meeting, Park filed a provisional injunction with the court.

The court stated, "The original shareholder proposal and the revised shareholder proposal are socially considered to be identical," and "The revised proposal merely supplements the original proposal." It further explained, "Since the original shareholder proposal met the requirements under the Commercial Act, the creditor (Park) has the right to request the inclusion of the revised shareholder proposal."

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