"'Harim 2nd Generation' Kim Jun-young Non-Executive Position... 'Not Even in the General Meeting Minutes'"

Usually, 'Non-Executive' Internal Directors Must Be Specified
No Evidence to Prove the Legitimacy of Work Type

It was revealed on the 22nd that the minutes of the NS Shopping shareholders' meeting, which recorded the process of appointing Kim Jun-young (31), the eldest son of Harim Group Chairman Kim Hong-guk, as an inside director, did not contain the word "non-executive" even once. This means there is no evidence anywhere in the company to justify Jun-young's working pattern of holding the inside director position as a non-executive without any board resolution procedure.

Kim Jun-young, the eldest son of Kim Hong-guk, chairman of Harim Group, was appointed as an internal director of NS Shopping last March.

According to comprehensive reporting by this paper, NS Shopping, which operates NS Home Shopping, held a shareholders' meeting in March and passed a resolution to appoint Jun-young as an inside director. Based on this resolution, Jun-young took office as an inside director on the 28th of the same month, and NS Shopping completed the registration procedure on April 4th. The term of office is three years from the date of appointment.

However, the minutes containing the results of the shareholders' meeting on that day did not mention the word "non-executive" even once. Jun-young has been serving as a non-executive inside director without holding any internal position since his appointment, but there is no basis in the shareholders' meeting minutes to consider him as non-executive.

Legal experts point out that such a case is not common. Attorney Won Jong-chae explained, "If a non-executive inside director is appointed, it is customary to specify in the minutes of the shareholders' meeting that the appointment is as a 'non-executive inside director.' If it is not specified, the position should basically be regarded as an executive inside director."

NS Shopping's side stated that although it is not recorded in the minutes, the agenda for Jun-young's director appointment itself was premised on being non-executive. A representative of NS Home Shopping said, "The appointment of Director Kim Jun-young was a procedure to fill the vacancy following Chairman Kim Hong-guk's resignation from the director position," adding, "Since Chairman Kim also served as a non-executive, we understand that this was implicitly considered at the shareholders' meeting."

Previously, Chairman Kim had held the director position since the establishment of NS Shopping in March 2005. Although he resigned once in October 2014, he returned as an inside director in March 2016, serving for over 20 years in total. Chairman Kim resigned from the director position again on March 28, the same day Jun-young was appointed. This marked the succession of the director position between father and son.

Exterior view of the NS Home Shopping complex building in Pangyo, Gyeonggi

It is reported that Jun-young is currently serving as an inside director without compensation. Reviewing NS Shopping's quarterly reports from last year, inside directors received an average remuneration of 61 million KRW per quarter, which translates to about 20 million KRW per month. Some interpret Jun-young's forfeiture of this remuneration as a kind of measure to quell criticism regarding his non-executive status and the succession of the director position between father and son.

Jun-young is also serving as a non-executive inside director without going through a board resolution procedure. NS Shopping stated, "According to commercial law and regulations, it is not mandatory to decide the executive status at each director appointment," adding, "If there is a need to change the position or role during the term, it should be decided by the board of directors." This is interpreted to mean that since the inside director was appointed on the premise of being non-executive at the shareholders' meeting, there is no need to hold a board meeting specifically for this.

Experts point out that NS Shopping's claim based on an implicit agreement to appoint a non-executive director lacks persuasiveness. Attorney Won said, "It does not make sense that the inside director was appointed at the shareholders' meeting implicitly on the premise of being non-executive," adding, "The series of circumstances can only be interpreted as an appointment of an executive inside director."

Attorney Baek Kwang-hyun (Barun Law LLC) also said, "If there was no separate mention at the shareholders' meeting, it is reasonable to regard the director as an executive inside director," adding, "It is difficult to consider that a non-executive inside director was appointed by implicit agreement unless there are special circumstances." The experts' statements imply that without legal provisions, an explicit expression of appointment is essential. However, the director appointment process at NS Shopping appears to lack such explicit expression.

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