'Brotherly Strife' Korea Tire Shareholders Meeting D-1... Chaos Due to 3% Rule

[Asia Economy Reporter Ki-min Lee] The Korea Tire shareholders' meeting, embroiled in a sibling management dispute, is just one day away. The outcome of the first round of the management battle over the appointment of audit committee members and outside directors will be decided on this day. Since the 3% rule (limiting shareholder voting rights to a maximum of 3%) under the amended Commercial Act passed last year applies to this shareholders' meeting, it is difficult to guarantee whether Cho Hyun-bum, president of Hankook & Company who holds a significant stake, can gain the upper hand.

According to Hankook & Company and Hankook Tire & Technology on the 29th, both companies will hold their regular shareholders' meetings on the 30th. On this day, the eldest son, Vice Chairman Cho, and the second son, President Cho, will clash over the appointment of outside directors and audit committee members.

Earlier, Vice Chairman Cho recommended Professor Lee Han-sang of Korea University as an outside director and audit committee member through a shareholder proposal to Hankook & Company. In contrast, Hankook & Company, supporting President Cho, nominated Kim Hye-kyung, an invited professor at Ewha Womans University Graduate School of International Studies who served as a Blue House secretary during the Lee Myung-bak administration.

In terms of shareholding alone, President Cho (42.9%) overwhelmingly surpasses Vice Chairman Cho (19.32%). However, it is difficult to predict President Cho's easy victory. Due to the amendment of the Commercial Act, both President Cho and Vice Chairman Cho can only exercise 3% of their voting rights. In this situation, the National Pension Service (5.21%) recently deciding to side with Vice Chairman Cho is expected to be a variable. The direction of minority shareholders, who hold 22.61%, is also hard to gauge. When Vice Chairman Cho's shareholder letter proposing Professor Lee as an outside director and calling for his resignation as vice chairman was disclosed last month, Hankook & Company's stock price plunged nearly 20%. An industry insider pointed out, "Vice Chairman Cho has not clarified when he will step down from the vice chairman position, whether he will maintain the CEO and board chairman positions, or whether he will dispose of his shares, so general shareholders seem to distrust him."

The shareholders' meeting of Hankook Tire & Technology held on the same day is also expected to unfold as a confrontation between President Cho's side and Chairman Cho Yang-rae's daughter, Chairwoman Cho Hee-kyung's side, over the appointment of audit committee members and outside directors. At this shareholders' meeting, President Cho's side has already nominated Im Ra, head of HR at General Electric (GE) Korea, as a candidate, while Chairwoman Cho's side proposed Lee Hye-woong, CEO of BRB Korea Advisors, through a shareholder proposal.

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