Intensified Dispute Between Current Management and Executive Director Park Cheol-wan Ahead of Kumho Petrochemical's General Meeting of Shareholders

Kumho Petrochemical encouraged proxy voting at the shareholders' meeting and provided a red ginseng set as a reward for supporting the company's agenda.

[Asia Economy Reporter Choi Dae-yeol] Ahead of the Kumho Petrochemical shareholders' meeting scheduled for the 26th, the 'off-market battle' between Chairman Park Chan-gu and the current management team, and Executive Director Park Cheol-wan, the largest individual shareholder and proposer of an independent shareholder proposal, appears to be heating up.

In response to Executive Director Park's criticism of the Kumho Resort acquisition, the company brought in experts from both inside and outside to manage the resort. The company emphasized that it is sufficient to transform it into a model capable of generating profits in the future. It is also expected to be useful in improving employee welfare and the company's internal and external image.

According to the company on the 17th, the real estate asset value of Kumho Resort is estimated at around 790 billion KRW, which is higher than the acquisition price even after deducting liabilities (370 billion KRW). Considering the financial capacity of Kumho Petrochemical and Kumho P&B Chemical, the acquisition entities, the company judged that the impact on the current financial status would be minimal.

Kumho Resort has about 82,000 pyeong of idle land at Asiana Country Club and about 35,000 pyeong at Asan Spavis. Various uses that can create added value, such as attracting external investment, are possible, and in particular, the company plans to upgrade outdated facilities through remodeling of the condo sector and pursue strategic partnerships with online platforms. When the company decided to acquire Kumho Resort earlier, Executive Director Park criticized it as "unrelated to existing businesses and an excessive investment," which the company rebutted.

At this shareholders' meeting, the company's agenda and Executive Director Park's agenda will compete in a vote. Sharp disputes also continued over which side the advisory firms would support. Previously, ISS, the world's largest proxy advisory firm, supported all of the company's proposals, while Glass Lewis sided with Executive Director Park's proposals.

There were also revelations of suspicious illegal activities by the company during the proxy voting process. According to materials disclosed by Executive Director Park, the company recently circulated proxy forms to shareholders encouraging them to vote in favor of the company's proposals. It was also revealed that shareholders who supported the company's proposals were given red ginseng sets as compensation. Executive Director Park asserted, "The company must immediately stop all illegal activities currently occurring during the proxy solicitation process."

Company proxy form with pre-marked approval or disapproval on the agenda items for the general meeting

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