JB Financial Board: "Eollain's Director Recommendations and Increase Requests Are Excessive"

Chairman Yu Gwan-woo Sends Letter
"Undermining Board Independence and Risk of Conflict of Interest"

The JB Financial Group board of directors has described the proposal by its second-largest shareholder, Align Partners Asset Management, to recommend and increase the number of director candidates as an "excessive demand." The board judged that it would undermine board independence and pose a conflict of interest risk.

According to financial sources on the 6th, Kwan-woo Yoo, chairman of the JB Financial Group board, stated in a "Chairman’s letter regarding shareholder proposals," "We consider Align Partners' shareholder proposal concerning the appointment of outside directors and non-executive directors to be an excessive demand." He added, "Although we accepted one new outside director candidate recommended by Align and proposed this candidate at the shareholders' meeting, demanding the appointment of multiple directors beyond this harms the board’s independence, fairness, and balance," further noting, "We view this as a conflict of interest risk."

Chairman Yoo said that the current composition of the JB Financial Group board is already independent and exemplary. He asserted, "Based on the board’s expertise and management capabilities, despite the regional limitations of a local financial holding company, we maintain industry-leading profitability." He also emphasized that, following the financial authorities’ recommended 'best practices in governance,' the board decided to increase the number of directors and enhance gender diversity. Yoo stated, "The nomination committee recommended two new director candidates, including a female director, to the shareholders' meeting, considering the collective coherence of the board’s composition, gender diversity, and fairness among major shareholders." These two candidates are Hee-seung Lee, director of Leading Ace Capital, and Myung-sang Lee, an attorney, recommended respectively by Align and OK Savings Bank (the third-largest shareholder).

The board also expressed opposition to Align’s demands for increased dividends and shareholder returns. Chairman Yoo said, "The uniform capital allocation and excessive shareholder return policies advocated by Align Partners hinder the company’s long-term investment, employment expansion, and growth," adding that such policies undermine shareholders’ long-term interests and the company’s sustainable growth.

Previously, JB Financial Group established a 'Shareholder Recommendation System for Outside Director Candidates,' allowing shareholders who have held voting shares for more than six months, even just one share, to recommend outside director candidates. In response, Align proposed increasing the number of outside directors, excluding those serving on the audit committee, to eight, and increasing the number of other non-executive directors to two. Align also recommended five director candidates: Ki-seok Kim, Su-jin Jung, Dong-hwan Kim, Nam-woo Lee, and Hee-seung Lee.

The JB Financial Group’s regular shareholders’ meeting will be held on the 28th of this month. The agenda items, including the increase in the number of directors and the appointment of shareholder-proposed director candidates, will be finally decided through voting at the meeting.

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