[Column] KT and POSCO Self-Renewal? Should Be Based on 'Numbers' Rather Than 'Investigation'

[Asia Economy Reporter Lim Hye-seon] If a film were made about the privately owned (ownerless) representative companies KT and POSCO, there would be a recurring scene every five years. It is the ordeal and replacement of the Chief Executive Officer (CEO). The company representative changed every time the administration changed. The new administration rarely left the representative appointed by the previous administration in place.

Former POSCO chairmen have been dishonorably forced to resign at every regime change. Former Chairman Kim Man-je was under the Kim Dae-jung administration, Former Chairman Yoo Sang-bu under the Roh Moo-hyun administration, Former Chairman Lee Gu-taek under the Lee Myung-bak administration, Former Chairman Jung Joon-yang under the Park Geun-hye administration, and Chairman Kwon Oh-joon stepped down after the Moon Jae-in administration took office. Since privatization, the only KT representative who succeeded in renewing his term and completed it was former Chairman Hwang Chang-gyu. Former Chairmen Nam Joong-soo and Lee Seok-chae succeeded in renewing their terms but voluntarily resigned during their terms due to investigations by the prosecution and other reasons.

This administration also sent signals to KT and POSCO representatives to step aside. The National Pension Service (NPS) wielded the power. The NPS publicly opposed the CEO renewals of KT and POSCO. The first target was KT. When KT’s board confirmed Koo Hyun-mo as the next CEO candidate, the largest shareholder (with a 10.74% stake), the NPS, unusually, issued a statement criticizing the 'emperor’s self-renewal.' In fact, people in both companies have never thought they elected their chairman themselves. The representative was always someone pushed by the administration or someone who received tacit approval. The term 'emperor’s self-renewal' is a provocative and entertaining rhetoric, but from the perspective of those who know the facts well, it is nonsense.

Rather than rhetoric, let’s speak with numbers. The NPS, which manages 900 trillion won of the nation’s retirement funds, must have justification to intervene in corporate leadership appointments. From early last year to the end of October, the NPS’s investment return rate was -5.29%, with losses exceeding 50 trillion won. The NPS made significant gains from investing in KT. KT’s stock price rose 70% over three years after CEO Koo Hyun-mo took office. Operating profit increased by 41% during this period. KT also increased dividends from 1,350 won in 2020 to 1,910 won last year. POSCO’s corporate value also rose.

In fact, KT and POSCO representatives need to gain recognition from this administration to complete their terms. This is a government elected by the people’s vote. According to convention, the two company representatives can be scrutinized. However, the verification process should be based on 'numbers' rather than 'investigations.' Investigations may be flashy but are surprisingly powerless. To convince the public, the reasons should be shown with numbers.

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