KCGI Management "Shareholder Rights Violated by Trickery"... Hyundai El "No Problem" Rebuttal

In response to KCGI Asset Management's criticism that "ahead of the Hyundai Elevator extraordinary general meeting scheduled for the 29th, the company arbitrarily selected separately elected audit committee members, undermining shareholder rights through 'tricks'," Hyundai Elevator stated, "There is absolutely no problem as we have secured the independence of the board of directors and complied with the amended Capital Markets Act."

On the 15th, KCGI Asset Management pointed out in an online press conference that "under the Commercial Act, shareholder proposal agendas must be submitted six weeks before the general meeting," and "Hyundai Elevator announced the general meeting schedule exactly six weeks ago on the 17th of last month, effectively blocking shareholder proposals." They also criticized, "The company’s decision to appoint audit committee members, who are supposed to be separately elected to protect minority shareholders’ rights, with personnel selected by the company exploits a loophole in the law and disregards the purpose of the system." On the 13th, Hyundai Elevator added the agenda for separately elected audit committee members through a corrected disclosure regarding the extraordinary general meeting agenda.

KCGI Asset Management emphasized, "Major shareholders such as Schindler Holdings and the National Pension Service must exercise responsible voting rights regarding the infringement of shareholder rights." They also called on H&Q Partners, known as an ally of the controlling group, stating, "The investors in the fund established by H&Q are leading domestic institutional investors. We believe they have standards and principles regarding minority shareholder rights and the Stewardship Code," urging them to express their position.

In response, a Hyundai Elevator official rebutted, "The investment contract between Hyundai Holdings Company and H&Q was terminated around the 16th of last month, and according to the contract terms, a new director appointment procedure became necessary, leading to the announcement of the extraordinary general meeting immediately upon deal closure."

They added, "In particular, one of the existing audit committee members voluntarily resigned mid-term due to personal reasons, making additional appointments unavoidable. Above all, this matter involves securing the independence of the board by appointing top experts in the relevant field through a fair process, and fully complying with the amended Capital Markets Act, so there is absolutely no reason to raise issues."

Furthermore, they stated, "Since August 2020, the amended Capital Markets Act has mandated the appointment of female directors in listed companies with assets exceeding 2 trillion won, and with the termination of the contract with H&Q and the voluntary resignation of Hyundai Elevator Chairwoman Hyun Jeong-eun from the board chair position, the additional appointment of a female outside director became necessary."

Earlier, in August, KCGI Asset Management sent an open shareholder letter demanding governance improvements, including the resignation of Chairwoman Hyun, the largest shareholder of Hyundai Elevator, from her inside director position. KCGI Asset Management holds about 2% of Hyundai Elevator’s shares. They also demanded fundamental management structure improvements and normalization of corporate value, criticizing Hyundai Elevator’s shareholder return plan for lacking any mention of fundamental profitability improvement measures.

Chairwoman Hyun expressed her intention to resign as a registered director at the Hyundai Elevator extraordinary board meeting held on the 17th of last month. Hyundai Elevator will hold an extraordinary general meeting on the 29th to form a new board of directors and will appoint a new board chair through a subsequent extraordinary board meeting.

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