Signs of a New Round in Kumho Petrochemical's "Nephew's Rebellion"... Park Cheolwan Says "It's Not Over Yet"

Park Criticizes Kumho Petrochemical's Plan for Treasury Share-Backed EB Issuance
Amended Commercial Act Lowers Barriers for Minority Shareholders
Kumho Petrochemical: "Decision Already Made to Cancel 50% of Treasury Shares"

A management dispute appears to be resurfacing at Kumho Petrochemical over how to utilize the company's treasury shares. Park Cheolwan, former executive director and the eldest son of the late Chairman Park Junggu as well as the nephew of Chairman Park Chanku, has openly criticized the potential issuance of exchangeable bonds (EB) backed by treasury shares, aiming to rejoin the board of directors. While the company has drawn a clear line, stating that no decision has been made, changes in laws and regulations are bringing treasury shares to the forefront as a key variable in the power struggle between the two sides.

On September 30, Park released a statement, declaring, "Issuing EBs with treasury shares undermines shareholder value and is an illegal attempt to strengthen the current management's control," and promised a strong response. He warned that if the board pushes ahead, he would hold them civilly and criminally liable, and demanded that plans for the cancellation or disposal of treasury shares be reported annually at the general shareholders' meeting through an amendment to the articles of incorporation.

Park Cheolwan, former executive director of Kumho Petrochemical

Kumho Petrochemical stated, "We have already decided to cancel half of the treasury shares we hold over three years, and have completed two rounds by this year. The final portion will be canceled in March next year." The company added that various options remain open for the remaining half, including strategic investments, employee compensation, and capital raising. It also clarified that the issuance of EBs is just one of the possibilities and that no discussions or decisions have been made so far.

The background to this conflict lies in the amended Commercial Act. The mandatory cumulative voting system, expanded separate election of audit committee members, and the introduction of electronic voting have significantly lowered the barriers for minority shareholders to enter the board. With Park holding an approximately 11% stake, it has become possible to promote specific candidates, bringing the management dispute back into the spotlight. However, it remains uncertain whether the treasury shares already held will be exempt from the amended law, leaving many variables for future developments.

Kumho Petrochemical currently holds treasury shares equivalent to about 14% of the total issued shares. Since the difference in stake between the company and Park is only about 5 percentage points, treasury shares serve not merely as a financial asset but as a casting vote that could determine the outcome of the management structure. If the shares are canceled, Chairman Park Chanku's side would see a relative increase in its shareholding, favoring the current management. However, if the shares are transferred to a third party, Park Cheolwan's return to the board could become more difficult. Ultimately, how the treasury shares are handled is expected to be the decisive variable in the future of Kumho Petrochemical's governance structure.

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