'Joka's Revolt' Park Cheol-wan, Former Executive Director of Kumho Petrochemical, Pressures Management to "Strengthen Shareholder-Friendly Policies"

Official Position on AGM Agenda and Shareholder Proposals
"Concerns Over Stock Plunge Despite Record-Breaking Earnings"

Criticism of Dividend Payout Cutbacks and Insufficient Share Buyback
Seven Proposals Including CEO and Chairman Separation Urged

Park Cheol-wan, former Executive Director of Kumho Petrochemical. (Photo by Former Executive Director Park)

[Asia Economy Reporter Moon Chaeseok] Park Cheolwan, former executive director and largest shareholder of Kumho Petrochemical, who is the nephew of Chairman Park Changu, revealed his personal opinions and reasons for shareholder proposals regarding the agenda of the regular general shareholders' meeting on the 11th.

Former Executive Director Park claimed that despite achieving the company's highest performance since its founding, the stock price plummeted to 150,000 KRW because the company did not keep its promises. He pointed out seven issues, stating that foreign and institutional investors have left, leaving small shareholders to bear the losses. According to the Korea Exchange, Kumho Petrochemical's stock price fell to about half of the closing price of 296,000 KRW on May 6 last year.

Specifically, he criticized ▲decline in dividend payout ratio ▲only 0.56% of treasury shares were canceled ▲lack of separation between CEO and chairman of the board ▲excessive executive compensation ▲insufficient mid- to long-term growth investment ▲failure to sell unrelated assets ▲and Kumho Resort being acquired at an excessively high price. He diagnosed that these reasons combined have caused Kumho Petrochemical to be ignored by the market regardless of its performance.

Former Executive Director Park said, "The company announced the convocation of the shareholders' meeting on the 8th, just three weeks before the meeting, and then announced several proposals, but only a few shareholders believe in the sincerity." He added, "The company said it would practice shareholder-friendly management, but the dividend payout ratio has decreased, and the cancellation of treasury shares is minimal." He further stated, "The company's dividend plan for this year, despite achieving the highest performance since its founding, is 10,000 KRW per common share and 10,050 KRW per preferred share, resulting in a consolidated dividend payout ratio of only 14%, down from 19.9% last year." In particular, he said that according to the company’s claim, on a separate basis, the profits of excellent subsidiaries such as Kumho P&B, which accounted for about 50% of last year's total net income, are excluded.

Former Executive Director Park also criticized the insufficient scale of treasury stock repurchases. He said, "The company announced that it would spend 150 billion KRW to repurchase treasury shares less than three weeks before the shareholders' meeting. While the repurchase is welcome, the scale is only 3% compared to the current market price, and although the company said it would cancel all acquired treasury shares after repurchase, it did not disclose a specific schedule."

Regarding the dividend payout ratio, he said, "It should be maintained at 30% based on future consolidated net income, but considering this year's chemical industry situation and the increased economic uncertainty due to the Ukraine invasion, we sincerely apologize to shareholders for proposing 21%. Instead, we request that the company cancel 10% of the 17.8% treasury shares it holds within this year," making a counterproposal.

Earlier, Kumho Petrochemical held a board meeting on the 8th and resolved and disclosed the scheduled date and agenda for the 45th regular shareholders' meeting. The shareholders' meeting will be held at 9 a.m. on the 25th. The main agenda items are ▲appointment of two outside directors ▲appointment of one audit committee member ▲approval of the 45th financial statements and dividend distribution ▲approval of the director remuneration limit, totaling four items. The shareholder proposal recently sent by former Executive Director Park to the company was also included in the related agenda.

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