Kumho Petrochemical "Executive Director Park Cheol-wan's Shareholder Proposal, Risk-Inducing"

[Asia Economy Reporter Hwang Yoon-joo] Kumho Petrochemical has rebutted the shareholder proposal by Executive Director Park Cheol-wan, who is engaged in a management rights dispute with Chairman Park Chan-gu, stating that it could pose risks. In particular, they pointed out that increasing dividends by seven times would make it difficult to invest in new businesses such as secondary battery materials, calling it unrealistic.

On the 12th, Kumho Petrochemical stated in a public opinion statement regarding proxy voting solicitation, "Executive Director Park's dividend expansion could cause risks in an uncertain management environment and may negatively affect credit ratings due to unexpected capital expenditures."

Kumho Petrochemical explained, "Executive Director Park's shareholder proposal to increase dividends would deplete the company's cash reserves at once, which is incompatible with Kumho Petrochemical's mid- to long-term development."

Earlier, Executive Director Park proposed dividends of 11,000 KRW per common share and 11,050 KRW per preferred share, share buybacks, and an average dividend payout ratio of over 50%. The proposed dividend amount corresponds to about 80% of the cash held as of the end of last year. Kumho Petrochemical opposed this, arguing that excessive dividends could instead harm shareholder interests.

Additionally, Kumho Petrochemical pointed out, "To realize Executive Director Park's plans such as establishing overseas factories, acquiring companies, and entering new businesses like secondary batteries, enormous funds are required. Maintaining the dividend payout ratio proposed by Executive Director Park would lead to insufficient investment funds." They added, "Presenting vague forecasts while proposing to exhaust funds for them is a contradictory proposal that would have a significant negative impact on mid- to long-term development."

Furthermore, Kumho Petrochemical clearly expressed opposition to Executive Director Park's shareholder proposal for director candidacy.

Kumho Petrochemical stated, "Executive Director Park has proposed himself as an inside director candidate, but it is questionable whether he has presented reasonable and persuasive management-related positions or plans while serving as an executive so far," adding, "If he wants to implement a vision for professional management, it is rational to propose a professional manager with verified capabilities as an inside director candidate."

Meanwhile, Executive Director Park is increasing his stake acquisition momentum. Park's father-in-law, Heo Kyung-soo, Chairman of Cosmo Group, purchased 0.05% of Kumho Petrochemical shares yesterday, registering as a related party of Executive Director Park. This amounts to about 3 billion KRW. Chairman Heo is the grandson of the late Heo Man-jung, co-founder of LG Group, and is a cousin of Heo Tae-soo, Chairman of GS Group.

With Chairman Heo's share purchase on this day, Executive Director Park's stake in Kumho Petrochemical slightly increased from 10.12% to 10.16%. Shares held by his mother and father-in-law do not have voting rights at this shareholders' meeting. Some interpret that Executive Director Park is considering his moves after the shareholders' meeting through expanding his stake.

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